The equilibrium price is:
A) the price at which quantity demanded is equal to quantity supplied.
B) never higher than what most consumers are willing to pay.
C) unstable.
D) the highest price at which all consumers can afford a good.

Question

Quizplus · Accepted Answer

The equilibrium price is the price at which the quantity demanded by consumers is equal to the quantity supplied by producers. It is the point where there is no surplus or shortage in the market, and the market is in a state of balance. Therefore, option A is the correct answer. Option B is incorrect because the equilibrium price is determined by the market forces of demand and supply, and it may or may not be higher than what consumers are willing to pay. Option C is also incorrect because the equilibrium price is a stable point in the market. Option D is incorrect because the highest price that all consumers can afford is determined by the consumers' income and not the market forces of demand and supply.

The Equilibrium Price Is