A market equilibrium occurs

Question

Quizplus · Accepted Answer

A market equilibrium occurs through the interaction of self-interested consumers and producers. This happens because consumers want to purchase goods at the lowest possible price, while producers want to sell goods at the highest possible price. As consumers and producers interact in the marketplace, a price is determined where the quantity demanded by consumers equals the quantity supplied by producers, resulting in a market equilibrium. No government regulation or complacency of consumers is necessary for this process to occur, although the profit motive of firms does play a role as producers seek to maximize their profits.

A Market Equilibrium Occurs