ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The amount of soap for sale matches the amount of soap that people want to buy.
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Everyone who wants or needs soap can easily afford to buy it
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Soap production ensures a good profit for the manufacturer
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The price of soap does not vary much from week to week
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Detailed explanation-1: -Answer. Market equilibrium is the amount of soap made that matches the amount of soap that people want to buy. Thus, option ‘D’ is the correct option.
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: -MARKETS: Equilibrium is achieved at the price at which quantities demanded and supplied are equal.
Detailed explanation-4: -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-5: -Market equilibrium refers to a situation in which market price is at a level where there is neither a shortage nor a surplus.