Equilibrium prices are determined by
A)supply alone.
B)demand alone.
C)both supply and demand.
D)the government.
E)nothing at all.

Question

Quizplus · Accepted Answer

Equilibrium prices are determined by both supply and demand. It is the point where the quantity of a good demanded by consumers is equal to the quantity supplied by producers, resulting in a market-clearing price. This is represented on a graph as the point where the supply and demand curves intersect. Neither supply nor demand alone can determine the equilibrium price. The government can influence the price through policies, but the fundamental determinant is still supply and demand.

Equilibrium Prices Are Determined by