4.3 Market Equilibrium: Bringing Demand and Supply Together

-Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $15, we would expect that

Question

4.3 Market Equilibrium: Bringing Demand and Supply Together
 
-Figure 4.2 illustrates the supply and demand for t-shirts. If the actual price of t-shirts is $15, we would expect that

Quizplus · Accepted Answer

At a price above equilibrium, there is a surplus of goods, in this case, t-shirts. To eliminate this surplus and reach equilibrium, the price will decrease until the quantity demanded equals the quantity supplied.