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At market equilibrium, the quantity demanded is always greater than the quantity supplied.
Shifts in demand or supply can lead to a new equilibrium price and quantity.
Market equilibrium ensures that all consumers are satisfied with their purchases.
An increase in supply, with demand held constant, typically lowers the equilibrium price.
Market equilibrium is static and does not change over time.
Understanding the Answer
Let's break down why this is correct
When supply rises while demand stays the same, sellers have more goods to sell. Other options are incorrect because Equilibrium means quantity demanded equals quantity supplied, not that demand is greater; Shifts in demand or supply do change equilibrium.
Key Concepts
Market Equilibrium Analysis
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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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