Equilibrium of Price and Quantity Quiz

What is the equilibrium price in a market?

• The price set by the government

• The price at which quantity demanded equals quantity supplied

• The highest price consumers are willing to pay

• The lowest price producers are willing to accept

What is the equilibrium quantity in a market?

• The quantity produced at maximum profit

• The quantity demanded when price is zero

• The quantity bought and sold at the equilibrium price

• The quantity supplied at the minimum price

True or False: At the equilibrium price, there is neither a surplus nor a shortage in the market.

• True

• False

Which of the following best describes a market surplus?

• Quantity demanded exceeds quantity supplied

• Quantity supplied exceeds quantity demanded

• Quantity demanded equals quantity supplied

• Price is below the equilibrium level

True or False: A shortage occurs when the market price is above the equilibrium price.

• True

• False

True or False: The equilibrium point is found at the intersection of the supply and demand curves.

• True

• False

If the demand curve shifts to the right while the supply curve remains unchanged, what happens to the equilibrium price and quantity?

• Price increases, quantity decreases

• Price decreases, quantity increases

• Both price and quantity increase

• Both price and quantity decrease

Suppose the supply of a good increases while demand remains constant. What is the effect on equilibrium?

• Equilibrium price rises and equilibrium quantity falls

• Equilibrium price falls and equilibrium quantity rises

• Both equilibrium price and quantity rise

• Both equilibrium price and quantity fall

True or False: If the current market price is below the equilibrium price, market forces will push the price upward toward equilibrium.

• True

• False

In a competitive market, if quantity supplied exceeds quantity demanded at the current price, producers will most likely:

• Increase the price to reduce the surplus

• Decrease the price to attract more buyers

• Reduce their production costs by hiring more workers

• Request government intervention to fix the price