Question

Market equilibrium occurs when:

a. there is no incentive for prices to change in the market.
b. there is no incentive for prices to change in the market, quantity demanded equals quantity supplied, and the market clears.
c. quantity demanded equals quantity supplied.
d. the market clears.

Answer 1

Answer: B-

there is no incentive for prices to change in the market, quantity demanded equals quantity supplied, and the market clears.

Step-by-step explanation:

Market equilibrium is an economic situation where the supply of an item is exactly equal to the quantity demanded. Here, price remains stable in this situation since there is neither surplus nor shortage in the market. If we plot a graph , we would see that the demand and supply curves would intersect meaning that suppliers produce the exact amount of goods and services consumers are willing and able to consume at a given time.