Figure 3.7

-Refer to Figure 3.7. Assume this is a market with no restrictions. Price and quantity will move toward

Question

Figure 3.7
 
-Refer to Figure 3.7. Assume this is a market with no restrictions. Price and quantity will move toward

Quizplus · Accepted Answer

The point where the supply and demand curves intersect is the market equilibrium point. In this case, the equilibrium point is where the price is $6 and the quantity exchanged is 100 units. At any price above $6, there is an excess supply, which puts downward pressure on the price. At any price below $6, there is an excess demand, which puts upward pressure on the price. Therefore, the market will move towards the equilibrium point, where the price is $6 and the quantity exchanged is 100 units.

Figure 3.7 -Refer to Figure 3.7. Assume This Is a Market with Is