What happens at the equilibrium price?

Question

Quizplus · Accepted Answer

At the equilibrium price, the quantity demanded by buyers is exactly equal to the quantity supplied by firms, meaning that everyone who wants to buy or sell goods at that price has been able to do so. This results in market satisfaction, making option D the correct choice. Option A is incorrect because, at equilibrium, buyers have no incentive to buy more since they can only purchase as many goods as are supplied. Option B is also incorrect because, at equilibrium, there cannot be a shortage since the quantity supplied is equal to the quantity demanded. Option C is also incorrect because firms have no incentive to increase production since they are already producing the quantity that is being demanded at the equilibrium price.

What Happens at the Equilibrium Price