In a competitive market, the point where the supply and demand curves intersect and the market price is determined is called the:

• A. Price ceiling
• B. Consumer surplus
• C. Market equilibrium
• D. Deadweight loss

Answer: (C)

Verified step by step guidance

1. Understand the key terms: The 'price ceiling' is a government-imposed limit on how high a price can be charged, 'consumer surplus' is the difference between what consumers are willing to pay and what they actually pay, and 'deadweight loss' refers to the loss of economic efficiency when the equilibrium outcome is not achieved.
2. Recall that in a competitive market, the supply curve represents the quantity producers are willing to sell at each price, and the demand curve represents the quantity consumers are willing to buy at each price.
3. Identify that the market price is determined at the point where the quantity supplied equals the quantity demanded, which is the intersection of the supply and demand curves.
4. Recognize that this intersection point is called the 'market equilibrium' because it balances the interests of buyers and sellers, resulting in an efficient allocation of resources.
5. Therefore, the term that describes the point where supply and demand curves intersect and the market price is determined is 'market equilibrium'.