In the context of market equilibrium, what is the price at which the intentions of buyers and sellers match?

• A. Marginal cost
• B. Maximum price
• C. Equilibrium price
• D. Minimum price

Answer: (C)

Verified step by step guidance

1. Understand that market equilibrium occurs when the quantity demanded by buyers equals the quantity supplied by sellers.
2. Recognize that the price at which this balance happens is called the equilibrium price.
3. Recall that at the equilibrium price, there is no tendency for the price to change because buyers and sellers are satisfied with the quantity exchanged.
4. Note that marginal cost refers to the cost of producing one more unit, maximum price is the highest price buyers are willing to pay, and minimum price is the lowest price sellers are willing to accept, but none of these necessarily ensure market balance.
5. Therefore, the price at which buyers' and sellers' intentions match is the equilibrium price.