Answer :
Final answer:
The equilibrium price is the price where quantity demanded equals quantity supplied. It establishes market stability and is found at the intersection of demand and supply curves. The correct answer to the question is option c. equilibrium price.
Explanation:
Understanding Equilibrium Price
The price at which the quantity demanded is exactly equal to the quantity supplied is called the equilibrium price.
This concept is fundamental in economics as it represents a state of balance in a market. At equilibrium, there is no incentive for consumers to pay more or for producers to lower their prices because the amount of goods consumers wish to buy matches the amount that producers want to sell.
Graphically, the equilibrium price is found at the point where the demand curve intersects with the supply curve. For example, if the demand for milk is high and the supply increases, the price will adjust until it reaches the equilibrium where the quantity of milk that consumers want to buy equals the quantity that producers are willing to sell.
Conclusion
Therefore, the correct answer to the question is option c. equilibrium price.
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