What is true about the point of equilibrium?

Question

a. There exists no surplus
b. There exists no shortage
c. Markets not currently in equilibrium will tend to the point of equilibrium
d. All of the above

Answer 1

The correct answer is d. All of the above.

Here's why:

a. At the point of equilibrium, the quantity supplied equals the quantity demanded, meaning there is no surplus (where supply exceeds demand).

b. Similarly, since the quantity supplied equals quantity demanded at equilibrium, there is also no shortage (where demand exceeds supply).

c. Markets not currently in equilibrium will tend to the point of equilibrium as prices adjust to reconcile supply and demand, moving towards the equilibrium point.

Thus, all the statements are true in the context of market equilibrium.