The equilibrium price is the price at which:

• A. supply exceeds demand
• B. quantity demanded equals quantity supplied
• C. demand exceeds supply
• D. producers maximize their profits

Answer: (B)

Verified step by step guidance

1. Understand the concept of market equilibrium: it occurs when the quantity demanded by consumers equals the quantity supplied by producers at a certain price.
2. Recall the definitions: 'quantity demanded' is how much consumers want to buy at a given price, and 'quantity supplied' is how much producers want to sell at that price.
3. Recognize that if supply exceeds demand, there is a surplus, causing downward pressure on price, so this is not equilibrium.
4. Recognize that if demand exceeds supply, there is a shortage, causing upward pressure on price, so this is not equilibrium either.
5. Therefore, the equilibrium price is the price at which the quantity demanded equals the quantity supplied, balancing the market with no shortage or surplus.