Equilibrium price and quantity are determined by the intersection of the demand and supply curves.

Question

Quizplus · Accepted Answer

This statement correctly states the basic principle of the market equilibrium. The quantity demanded by consumers and the quantity supplied by producers will only be equal at a single point on the graph, which is where the two lines intersect. This intersection represents the market-clearing price and quantity, which is where the market will naturally settle barring any external intervention.

Equilibrium Price and Quantity Are Determined by the Intersection of the Demand