Market equilibrium occurs ____________________________.

Question

When buyers and sellers are in agreement over price and the quantities they will exchange

When marginal benefits exceed marginal costs

When any deviation from market equilibrium results in an improvement in welfare

When consumer surplus is greater than producer surplus

Answer 1

Market equilibrium occurs when buyers and sellers are in agreement over price and the quantities they will exchange.

This definition captures the point at which the quantity of goods demanded by consumers equals the quantity of goods supplied by producers, resulting in a stable market price.