What price describes the point at which the quantity supplied equals the quantity demanded?

• A. Market price
• B. Nominal price
• C. Equilibrium price
• D. Selling price

Answer: (C)

Equilibrium price is the point where the quantity producers are willing to supply exactly matches the quantity consumers are willing to buy. It’s the market-clearing price, the balance where the forces of supply and demand intersect, so there’s no pressure for the price to move up or down unless something shifts either curve. If the price rises above this level, a surplus happens because suppliers want to sell more than buyers want to buy. If the price falls below it, a shortage occurs because buyers want to purchase more than producers are willing to supply. The equilibrium price emerges from the interaction of supply and demand, reflecting the balance of outcomes in the market. Terms like market price, nominal price, or selling price describe price in broader or different contexts and don’t specify that balance point.