Market equilibrium occurs when the
A)quantity supplied equals quantity demanded.
B)quantity supplied is greater than quantity demanded.
C)quantity supplied is less than quantity demanded.
D)quantity supplied is fixed by the government.
E)quantity demanded equals zero.

Question

Quizplus · Accepted Answer

Market equilibrium occurs when the quantity supplied by producers is equal to the quantity demanded by consumers. This means that there is no excess supply or demand, and prices will tend to stabilize at this point. Option B and C would represent a market disequilibrium, where either there is more supply than demand or vice versa. Option D is not typically how markets operate, as the government may impose regulations or taxes but does not directly fix supply. Option E indicates no demand, which does not constitute a market equilibrium.

Market Equilibrium Occurs When the