What happens when the price of a good is set at the equilibrium level?

Multiple choice question for Market. Select an option, then review the explanation below.

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A shortage occurs and prices will decreaseThe amount buyers want equals the amount sellers offer, so the price stays stableAn excess supply exists and prices will increaseA shortage occurs and prices will increaseAn excess supply exists and prices will decrease

Explanation

When the price is at equilibrium, the quantity demanded by consumers matches the quantity supplied by producers, resulting in a stable price with no tendency to change.

Practice related questions from the same subject.

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5.Why is a competitive equilibrium considered Pareto efficient?

What happens when the price of a good is set at the equilibrium level?

Explanation

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