Question

Which statement defines equilibrium in a graph showing demand and supply curves?

Answer 1

At equilibrium, the graph of supply and demand cross.

At this point :

The quantity demanded equals to the quantity supplied.

There are also two points of disequilibrium.

These are :

1.) When the supply is more than the demand.

This will have a consequence on the economy whereby, prices will go down.

2.) When demand is higher than supply.

At this point price of goods will be higher since the goods are few yet the buyers are many. The sellers take advantage of this and sell it at a higher price.

Answer 2

Solution:

The equilibrium price is the factor that determines the equilibrium in demand and supply curve.

It is the price at which the producers wish to sell the products and the buyers wish to buy the products.

The demand and supply meeting at this point is called equilibrium price.