Question

In a perfectly competitive market, which of the following conditions must hold for the market to be in equilibrium?

A Quantity demanded equals quantity supplied, and there is no tendency for price to change.
B Firms are earning economic profits, incentivizing new firms to enter the market.
C There is excess demand, leading to upward pressure on prices.
D There is excess supply, leading to downward pressure on prices.
E The government sets the price at a level that ensures all goods are sold.
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