If markets are in equilibrium, which of the following statements is true?

• A. There is a persistent shortage in the market.
• B. Quantity demanded equals quantity supplied.
• C. The price will continue to rise.
• D. Buyers and sellers are unable to agree on a price.

Answer: (B)

Verified step by step guidance

1. Understand the concept of market equilibrium: it occurs when the quantity demanded by buyers equals the quantity supplied by sellers at a certain price.
2. Recognize that at equilibrium, there is no tendency for the price to change because the market clears—meaning no excess demand (shortage) or excess supply (surplus) exists.
3. Analyze each statement: a persistent shortage implies quantity demanded exceeds quantity supplied, which contradicts equilibrium.
4. Similarly, if the price were to continue rising, it would indicate that demand exceeds supply, so the market is not in equilibrium.
5. Conclude that the true statement at equilibrium is that quantity demanded equals quantity supplied, ensuring the market clears and both buyers and sellers agree on the price.