ECONOMICS
SUPPLY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
There is no relationship.
|
|
|
They are the same price.
|
|
|
The market-clearing price exceeds the equilibrium price.
|
|
|
The equilibrium price exceeds the market-clearing price.
|
Detailed explanation-1: -The phrase “equilibrium price” is often used interchangeably with “market clearing price.” Both refer to the price at which the number of goods for sale is exactly equal to the quantity that buyers wish to purchase. In other words, it is the price at which the market is in equilibrium.
Detailed explanation-2: -Equilibrium price. When a product exchange occurs, the agreed upon price is called an equilibrium price, or a market clearing price. Graphically, this price occurs at the intersection of demand and supply as presented in Image 1. In Image 1, both buyers and sellers are willing to exchange the quantity Q at the price P.
Detailed explanation-3: -The equilibrium price is also sometimes called the market-clearing price, because, at this price, everyone in the market has been satisfied: Buyers have bought all they want to buy, and sellers have sold all they want to sell.
Detailed explanation-4: -Explanation: Market-clearing price is defined as the price at which quantity demanded equals the quantity supplied. This price is also known as the equilibrium price.