The equilibrium price in a competitive market

Question

Quizplus · Accepted Answer

In a competitive market, the equilibrium price is the price at which the demand for goods is equal to the supply of goods. At this price, there is no excess supply or demand, and the market is said to be in a state of equilibrium. This price can fluctuate over time as the demand and supply of goods change. Option A is incorrect because the equilibrium price only ensures that those who are willing and able to pay for the good at the given price can obtain it. Option C is also incorrect because the equilibrium price can change over time due to shifts in demand and supply.

The Equilibrium Price in a Competitive Market