A market will
a. always move towards equilibrium
b. always have excess demand
c. always have excess supply
d. never move towards equilibrium because prices are always increasing
2007-01-30 15:00:24 · 4 answers · asked by wencar29 1 in Social Science ➔ Economics
a) it's the "fair" point that buyers and sellers agree on.
Equillibrium is also referred to as the "market clearing price" if that helps. :)
2007-01-30 15:04:46 · answer #1 · answered by KatEyez4 3 · 0⤊ 0⤋
The correct answer is A: Always move toward equilibrium.
That is the function of supply and demand, prices settle at the intersection of a downward sloping demand curve and an upward slope supply curve. Where they intersect is the market equilibrium.
Prices cannot be maintained at anything other than equilibrium price in the long run, because supply and demand would set the price to an equilibrium price.
2007-01-30 17:33:10 · answer #2 · answered by Dave 6 · 0⤊ 0⤋
none of the above.
it might be a, if slopes of supply and demand are right.
2007-01-30 16:36:56 · answer #3 · answered by Anonymous · 0⤊ 0⤋
a
2007-01-30 15:13:32 · answer #4 · answered by Anonymous · 0⤊ 0⤋