In the simple supply and demand diagram, equilibrium prices are determined by
A) demand
B) supply
C) both supply and demand
D) the government

Question

Quizplus · Accepted Answer

Equilibrium prices are determined by both supply and demand, as they intersect at the point where the quantity demanded and quantity supplied are equal. The government may intervene and affect supply and demand, but in the absence of government intervention, equilibrium prices are determined by the market forces of supply and demand.

In the Simple Supply and Demand Diagram, Equilibrium Prices Are