A price at which quantity demanded equals quantity supplied
A)will cause a shift in demand.
B)is an equilibrium price.
C)could not possibly exist in the short run.
D)is below the equilibrium price.
E)is above the equilibrium price.

Question

Quizplus · Accepted Answer

Equilibrium price is the price at which quantity demanded equals quantity supplied and there is no surplus or shortage. This is the point at which the market clears, and there is no pressure for further changes in price or quantity. Therefore, option B is correct. Option A is incorrect because equilibrium price does not cause a shift in demand. Option C is incorrect as the question does not mention anything about the short run. Option D is incorrect because if the price is below the equilibrium price, there will be a shortage in the market. Finally, option E is incorrect because if the price is above the equilibrium price, there will be a surplus in the market.

A Price at Which Quantity Demanded Equals Quantity Supplied