Question
What is equilibrium price?
When free trade standards are used.
When supply equals demand.
When an economy is balanced between market and command traits
When free trade standards are used.
When supply equals demand.
When an economy is balanced between market and command traits
Answers
GPT-4o mini
Equilibrium price is defined as the price at which the quantity of a good or service supplied equals the quantity demanded. This is the point in a market where the supply and demand curves intersect. At this price, there is no surplus (excess supply) or shortage (excess demand) of the product, leading to a stable market situation.
In the context of your examples:
1. **When free trade standards are used**: Equilibrium price can be affected by international trade, tariffs, and regulations. In a free trade scenario, the equilibrium price may shift as countries engage in trade, leading to new supply and demand dynamics.
2. **When supply equals demand**: This is the fundamental definition of equilibrium price. It occurs at the intersection point of the supply and demand curves in a market.
3. **When an economy is balanced between market and command traits**: In such a scenario, the equilibrium price might not be determined solely by the market forces of supply and demand. Government interventions (like price controls or subsidies) may influence it. However, the concept of equilibrium price still applies as long as there exists a point where the quantity supplied matches the quantity demanded.
In summary, equilibrium price is specifically the price at which supply equals demand, regardless of the broader economic context.
In the context of your examples:
1. **When free trade standards are used**: Equilibrium price can be affected by international trade, tariffs, and regulations. In a free trade scenario, the equilibrium price may shift as countries engage in trade, leading to new supply and demand dynamics.
2. **When supply equals demand**: This is the fundamental definition of equilibrium price. It occurs at the intersection point of the supply and demand curves in a market.
3. **When an economy is balanced between market and command traits**: In such a scenario, the equilibrium price might not be determined solely by the market forces of supply and demand. Government interventions (like price controls or subsidies) may influence it. However, the concept of equilibrium price still applies as long as there exists a point where the quantity supplied matches the quantity demanded.
In summary, equilibrium price is specifically the price at which supply equals demand, regardless of the broader economic context.