A market equilibrium occurs

Question

Quizplus · Accepted Answer

A market equilibrium occurs through the interaction of self-interested buyers and sellers. This interaction leads to the determination of the market price and quantity where the quantity demanded equals the quantity supplied, resulting in neither a shortage nor a surplus of the good or service. The market equilibrium can be achieved without government regulation or complacency of consumers. However, the profit motive of firms can be a contributing factor to the market equilibrium, as firms will adjust their price and quantity supplied based on their desire to maximize profits.

A Market Equilibrium Occurs