ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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there is no shortage or surplus in a competitive market
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quantity supplied equals quantity demanded in a competitive market
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there is no tendency for market price to rise or fall
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all of the above conditions are achieved
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Detailed explanation-1: -A market is in equilibrium if at the market price the quantity demanded is equal to the quantity supplied. The price at which the quantity demanded is equal to the quantity supplied is called the equilibrium price or market clearing price, and the corresponding quantity is the equilibrium quantity.
Detailed explanation-2: -Example #1 Company A sells Mangoes. During summer there is a great demand and equal supply. Hence the markets are at equilibrium. Post-summer season, the supply will start falling, demand might remain the same.
Detailed explanation-3: -Market equilibrium is a situation where quantity supplied is in balance with quantity demanded at the prevailing prices at a given point of time.
Detailed explanation-4: -Economic equilibrium is a theoretical construct only. The market never actually reaches equilibrium, though it is constantly moving toward equilibrium.