At the equilibrium price, quantity demanded equals quantity supplied. Which of the following best describes market equilibrium?

• A. The point where price is maximized
• B. The point where quantity demanded exceeds quantity supplied
• C. The point where quantity demanded equals quantity supplied
• D. The point where quantity supplied exceeds quantity demanded

Answer: (C)

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 that at equilibrium, there is no shortage or surplus in the market because the amount consumers want to buy exactly matches the amount producers want to sell.
3. Recognize that if quantity demanded exceeds quantity supplied, there is a shortage, causing upward pressure on price.
4. Recognize that if quantity supplied exceeds quantity demanded, there is a surplus, causing downward pressure on price.
5. Therefore, the best description of market equilibrium is the point where quantity demanded equals quantity supplied.