5. What is the equilibrium price and quantity shown in the diagram below?

Question

BlackTom AI · Accepted Answer

Equilibrium occurs where the supply and demand curves cross; reading the graph shows that intersection at price $1.00 and quantity 200.

1) Relevant knowledge points and concepts
- Market equilibrium is the price and quantity where quantity supplied equals quantity demanded (the intersection of the supply and demand curves).
- To read a supply-and-demand diagram, match the intersection point to the labeled ticks on the price (vertical) and quantity (horizontal) axes.

2) Step-by-step reasoning
- Locate the point where the upward-sloping supply line meets the downward-sloping demand line. That is the equilibrium point.
- From that intersection, follow a horizontal dashed line to the price axis and a vertical dashed line to the quantity axis to read the numeric values.

3) Intermediate steps / reading the graph
- On the price axis the major ticks shown are $0.50 (lower dashed line), $1.00 (middle dashed line), and $1.60 (top dashed line).
- On the quantity axis the major ticks shown are 130 (left), 200 (middle), and 290 (right).
- The intersection lies at the middle horizontal and middle vertical dashed lines → price = $1.00 and quantity = 200.

4) Why the correct answer is correct
- The intersection of supply and demand is explicitly aligned with the $1.00 price tick and the 200 quantity tick, so the equilibrium price–quantity pair is ($1, 200).

5) Why the other options are incorrect
- (a) $1.60 and 130: combines the top price and left quantity, not the intersection point.
- (b) $0.50 and 130: uses the lower price and left quantity, not where the curves cross.
- (d) $1.60 and 290: pairs the top price with the right quantity; again not the intersection.

6) Conclusion
The equilibrium price and quantity shown are $1 and 200, which matches answer c.

5. What is the equilibrium price and quantity shown in the diagram below?Single choice

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