Learning Path
Question & Answer
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The quantity demanded decreases significantly
The quantity demanded remains relatively stable
The market equilibrium price decreases
The quantity supplied becomes less than the quantity demanded
Understanding the Answer
Let's break down why this is correct
When the price goes up, people still buy almost the same amount because the good is needed or has few substitutes. Other options are incorrect because Some think the quantity bought falls a lot when price rises; It is easy to think a higher price will lower the price again.
Key Concepts
Market Equilibrium Analysis
medium level question
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Deep Dive: Market Equilibrium Analysis
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Definition
Market equilibrium analysis focuses on the point where the quantity demanded by consumers matches the quantity supplied by suppliers at a specific price level. This equilibrium point determines the market price and quantity, which can change over time due to shifts in demand and supply patterns.
Topic Definition
Market equilibrium analysis focuses on the point where the quantity demanded by consumers matches the quantity supplied by suppliers at a specific price level. This equilibrium point determines the market price and quantity, which can change over time due to shifts in demand and supply patterns.
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