The theory underlying demand and supply curves assumes that, all other things unchanged, the primary variable that assures the equality of the quantities demanded and supplied is:

Question

Quizplus · Accepted Answer

The theory of demand and supply states that price is the primary variable that brings about an equilibrium between the quantities demanded and supplied in a market. The law of demand states that as the price of a good or service goes up, the quantity demanded for it reduces, while the law of supply states that as the price goes up, the quantity supplied goes up. Therefore, when the quantity demanded is equal to the quantity supplied, an equilibrium is reached, and this occurs at a specific price. Hence, the correct answer is D - price.

The Theory Underlying Demand and Supply Curves Assumes That, All