Market equilibrium exists when _________ at the prevailing price?
Correct answer: A. quantity demanded equals quantity supplied
- A. quantity demanded equals quantity supplied
- B. quantity demanded is less than quantity supplied
- C. quantity supplied is greater than quantity demanded
- D. quantity demanded is greater than quantity supplied
Explanation
Market equilibrium occurs where buyers' planned purchases equal sellers' planned sales at the prevailing price. A shortage or surplus exists when these quantities differ.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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