An equilibrium:
A)is a condition that is reached eventually in any market.
B)is a state that will continue indefinitely as long as exogenous factors remain unchanged.
C)is a concept that is often meaningless because most markets never reach equilibrium.
D)is a temporary state.

Question

Quizplus · Accepted Answer

An equilibrium is a state where the demand for a product or service is equal to the supply of that product or service. In a competitive market, this state will continue indefinitely as long as exogenous factors remain unchanged. However, in reality, markets are often subject to various exogenous factors that can cause shifts in demand and supply or changes in other conditions, leading to a new equilibrium point. So, option B is the correct answer. An equilibrium is a state where demand and supply are perfectly balanced and there is no excess demand or supply. In this state, market forces will continue to operate and there will be no tendency for the price and quantity to change as long as exogenous factors (such as changes in technology or consumer preferences) remain unchanged. Therefore, option B is the correct answer. Option A is incorrect because not all markets necessarily reach equilibrium. Option C is incorrect because equilibrium is a meaningful concept in economics. Option D is incorrect because equilibrium is a lasting state.

An Equilibrium