In a free market, the market price and quantity in the above figure will adjust to equilibrium values of
A) $1 per gallon and 50 million gallons.
B) $4 per gallon and 10 million gallons.
C) $2 per gallon and 60 million gallons.
D) $2 per gallon and 30 million gallons.

Question

Quizplus · Accepted Answer

In a free market, equilibrium is reached where the supply and demand curves intersect, indicating the price at which the quantity supplied equals the quantity demanded. Choice D correctly identifies this equilibrium point with a price of $2 per gallon and a quantity of 30 million gallons.

In a Free Market, the Market Price and Quantity in the Above