Which of the following will hold true if the market for cameras is in equilibrium at a price of $40?
A) Sellers of cameras will have an incentive to charge a price higher than $40.
B) The quantity of cameras produced will equal the quantity of cameras bought in the market.
C) Buyers of cameras will want to buy fewer cameras than they are purchasing at equilibrium.
D) If the cost of producing cameras falls below $40 per camera, all sellers will stop supplying cameras.

Question

Quizplus · Accepted Answer

Equilibrium is a state where the quantity supplied equals the quantity demanded, which is represented by the point of intersection of the supply and demand curves. Therefore, at a price of $40, the quantity of cameras produced will be equal to the quantity bought in the market, resulting in a state of balance or equilibrium.

Option A is incorrect because sellers will not have an incentive to charge a higher price as this will lead to a surplus in the market, which will eventually lead to a decrease in the price of cameras.

Option C is incorrect because if buyers want to buy fewer cameras than they are purchasing at equilibrium, the market would not be in equilibrium.

Option D is incorrect because if the cost of producing cameras falls below $40, sellers will still continue to supply cameras as long as they can cover their costs and make a profit, resulting in an increase in the supply of cameras and downward pressure on the price.

Which of the Following Will Hold True If the Market