What Happens When Demand Meets Supply?

What is the point where buyers and sellers agree called?

• Market equilibrium

• Equilibrium price

• Equilibrium quantity

• Supply and demand

Why do competitive markets move toward equilibrium?

• To satisfy consumers

• To maximize profits

• To balance supply and demand

• To establish market dominance

Create a metaphor illustrating how demand and supply work together to create equilibrium.

• A seesaw with equal weights on both sides

• A tug of war with equal strength on both sides

• A dance with perfect synchronization

• A puzzle with matching pieces

What is the price at which supply and demand are in balance called?

• Market price

• Equilibrium price

• Clearing price

• Negotiated price

What is the quantity at which supply and demand are in balance called?

• Market quantity

• Equilibrium quantity

• Clearing quantity

• Optimal quantity

What happens at the point of market equilibrium?

• Consumers are satisfied, but producers are not

• Producers are satisfied, but consumers are not

• Both consumers and producers are satisfied

• Neither consumers nor producers are satisfied

What happens when the price is set too high in a market?

• Consumers demand more than producers can supply

• Producers supply more than consumers demand

• Consumers and producers are both satisfied

• Consumers and producers are both dissatisfied

What happens when the price is set too low in a market?

• Consumers demand more than producers can supply

• Producers supply more than consumers demand

• Consumers and producers are both satisfied

• Consumers and producers are both dissatisfied

What is the law that governs the movement of prices in a competitive market?

• Law of supply

• Law of demand

• Law of supply and demand

• Law of equilibrium

According to economist Alfred Marshall, how do supply and demand operate?

• Independently

• Sequentially

• Randomly

• Together