Asked by Breanna Clayton on May 07, 2024
Verified
If the actual market price differs from the equilibrium price,buyers and sellers tend to make economic choices that restore the equilibrium level.
Equilibrium Price
The market price at which the quantity of goods supplied equals the quantity of goods demanded, resulting in a stable market condition.
Economic Choices
Decisions made by individuals, firms, or governments regarding the allocation of resources and the distribution of goods and services.
- Acquire knowledge on the notion of equilibrium price and the mechanisms through which market dynamics endeavor to reach it.
Verified Answer
DG
Denaya GlantonMay 09, 2024
Final Answer :
True
Explanation :
When the actual market price is above or below the equilibrium price, it creates either a surplus or a shortage, respectively. Buyers and sellers adjust their demand and supply in response to these conditions, which tends to push the market back towards the equilibrium price where supply equals demand.
Learning Objectives
- Acquire knowledge on the notion of equilibrium price and the mechanisms through which market dynamics endeavor to reach it.