The equilibrium price in a competitive market
A) Ensures that anyone who wants the good can get it.
B) Equates the demand for goods with the supply of goods.
C) Remains unchanged forever.
D) Remains unchanged only if demand doesn't change.

Question

Quizplus · Accepted Answer

The equilibrium price in a competitive market is the price at which the quantity demanded of a good or service equals the quantity supplied, resulting in no shortage or surplus. In other words, it equates the demand for goods with the supply of goods. This ensures that the market is efficient and clears supply and demand without any excess inventory or unsatisfied customers. The equilibrium price can change if either demand or supply changes, as the balance may shift and a new equilibrium must be reached.

The Equilibrium Price in a Competitive Market