The price at which the quantity demanded equals the quantity supplied is referred to as __________.

Question

BlackTom AI · Accepted Answer

Market equilibrium is the price (and accompanying quantity) at which the quantity demanded by buyers equals the quantity supplied by sellers.

1) Relevant knowledge points and concepts
- Demand: the relationship showing how much of a good consumers will buy at different prices.
- Supply: the relationship showing how much producers will offer at different prices.
- Equilibrium price and quantity: the price and quantity where the demand and supply curves intersect; at that point there is no upward pressure (surplus) or downward pressure (shortage) on price.
- Market equilibrium: the state of the market when price and quantity are at their equilibrium values.

2) Step-by-step reasoning
- Begin with the definitions of demand and supply curves: for each possible price, demand gives quantity demanded and supply gives quantity supplied.
- When price is above the equilibrium, quantity supplied > quantity demanded (surplus); sellers lower price to clear inventory.
- When price is below the equilibrium, quantity demanded > quantity supplied (shortage); buyers bid the price up.
- These upward/downward adjustments continue until price reaches the level where quantity demanded equals quantity supplied.
- That final price (and the corresponding quantity) defines the market equilibrium.

3) Calculations
- No numerical calculation is required here because the statement describes a qualitative condition: price at which Qd = Qs. In graphical or algebraic problems you would set Qd(P) = Qs(P) and solve for P (the equilibrium price) and then find Q (the equilibrium quantity).

4) Why the correct answer is correct
- The phrase “price at which the quantity demanded equals the quantity supplied” is the textbook definition of the equilibrium price in a market; the state described is market equilibrium.

5) Why the other options are incorrect
- a. Income statement: a financial report showing revenues and expenses, unrelated to supply/demand intersection.
- c. Economic impact study: an analysis of economic effects of projects/policies, not the market price where Qd = Qs.
- d. Balance sheet: a financial snapshot of assets, liabilities, and equity, not a market price concept.

Conclusion: The correct choice is b. market equilibrium, which matches the provided answer.

The price at which the quantity demanded equals the quantity supplied is referred to as __________.Single choice

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