Which of the following best describes what occurs during market equilibrium?

• A. The quantity demanded equals the quantity supplied.
• B. The market price is above the equilibrium price.
• C. There is a persistent shortage in the market.
• D. Producers are unable to sell any goods.

Answer: (A)

Verified step by step guidance

1. Understand the concept of market equilibrium: it is the point where the quantity of a good demanded by consumers equals the quantity supplied by producers.
2. Recall that at equilibrium, the market price adjusts so that the amount consumers want to buy matches exactly the amount producers want to sell.
3. Recognize that if the market price is above the equilibrium price, there will be a surplus because quantity supplied exceeds quantity demanded.
4. Know that if the market price is below the equilibrium price, there will be a shortage because quantity demanded exceeds quantity supplied.
5. Therefore, the best description of market equilibrium is when the quantity demanded equals the quantity supplied.