When supply and demand are essentially equal the economy is said to be in________________?
Correct answer: B. equilibrium
- A. a recession
- B. equilibrium
- C. equivalence
- D. abeyance
Explanation
Equilibrium occurs when the quantity supplied and quantity demanded are equal, leaving no inherent pressure for the market price to change. Recession and abeyance describe different conditions, not market balance.
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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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