This price is theoretically set by the intersection of the supply and demand curves.
A) Profit-maximizing
B) Equilibrium
C) Sales maximizing
D) Minimum
E) Ideal

Question

Quizplus · Accepted Answer

The concept of equilibrium price is based on the balance between the quantity of a product that producers want to sell and the quantity that consumers want to buy at a certain price. When supply equals demand, there is no excess supply or demand, and therefore the market is stable. The equilibrium price is the price at which the quantity of a good that buyers are willing to buy equals the quantity of the good that producers are willing to sell. This balance results in the most efficient allocation of resources and the highest total surplus for society as a whole. Therefore, B is the best choice because it describes the price that results from the intersection of supply and demand curves.

This Price Is Theoretically Set by the Intersection of the Supply