Question

The equilibrium price in a perfectly competitive market is established by which of the following? ​

Answer 1

Answer:

This law states that supply increases with the rise in price, and decreases with the fall in price. Thus demand and supply are the two counteracting forces which move in the opposite directions. Price is determined at a point where these two forces are equal, and that is known as the equilibrium price.

Explanation:

Equilibrium in perfect competition is the point where market demands will be equal to market supply. A firm's price will be determined at this point. In the short run, equilibrium will be affected by demand. In the long run, both demand and supply of a product will affect the equilibrium in perfect competition.