The equilibrium or market-clearing price occurs where

Question

Quizplus · Accepted Answer

The equilibrium or market-clearing price is the price at which the quantity demanded of a good or service equals the quantity supplied. At this point, there is no excess supply or demand, and the market is in a state of balance. Choice B is incorrect because a shortage would indicate that the quantity demanded exceeds the quantity supplied, which is not the case at the equilibrium price. Choices C and D are also incorrect because they do not describe the conditions necessary for an equilibrium price to arise.

The Equilibrium or Market-Clearing Price Occurs Where