Figure 4-21

-Which price in Figure 4-21 is equilibrium?
A) P1
B) P2
C) P3

Question

Figure 4-21
 
-Which price in Figure 4-21 is equilibrium?
A) P1 
B) P2 
C) P3

Quizplus · Accepted Answer

P2 is the equilibrium price as it is the point where the supply and demand curves intersect, indicating that the quantity demanded and supplied are equal at that price. P1 is a price where the quantity demanded is higher than the quantity supplied, leading to a shortage, and P3 is a price where the quantity supplied is higher than the quantity demanded, leading to a surplus. Therefore, P2 is the best choice as it represents a stable market equilibrium.

Figure 4-21 -Which Price in Figure 4-21 Is Equilibrium