Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
B → D → C → A
B
D → C → A → B
C
A → B → D → C
D
C → A → B → D
Understanding the Answer
Let's break down why this is correct
Answer
In a perfectly competitive market, achieving market equilibrium starts with the interaction of supply and demand determining the market price. Once the price is set, consumers demand goods at this equilibrium price, which means they are willing to buy the amount that is available. At the same time, producers supply goods at this price, wanting to sell as much as they can. As firms realize profits, new firms enter the market, increasing supply until profits are driven down to zero. This process ensures that the market reaches a balance where the quantity supplied equals the quantity demanded, stabilizing the market.
Detailed Explanation
First, supply and demand set the market price. Other options are incorrect because This order suggests consumers buy before producers supply; This option implies firms enter the market before knowing the price.
Key Concepts
Market Equilibrium
Perfectly Competitive Market
Supply and Demand
Topic
Market Structures in Economics
Difficulty
easy level question
Cognitive Level
understand
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