In a competitive market, the point at which quantity supplied equals quantity demanded is called the:

• A. Price ceiling
• B. Market equilibrium (equilibrium price and quantity)
• C. Marginal cost
• D. Consumer surplus

Answer: (B)

Verified step by step guidance

1. Understand the key terms: 'quantity supplied' is the amount producers are willing to sell at a given price, and 'quantity demanded' is the amount consumers want to buy at that price.
2. Recognize that the point where quantity supplied equals quantity demanded is where the market clears, meaning there is no surplus or shortage.
3. Recall that this point is known as the 'market equilibrium,' which determines the equilibrium price and equilibrium quantity in a competitive market.
4. Differentiate this from other terms: a 'price ceiling' is a government-imposed maximum price, 'marginal cost' is the cost of producing one more unit, and 'consumer surplus' is the difference between what consumers are willing to pay and what they actually pay.
5. Conclude that the correct term for the point where quantity supplied equals quantity demanded is 'market equilibrium.'