What term describes the point at which quantity demanded equals quantity supplied in a market?

• A. Market equilibrium
• B. Equilibrium price
• C. Equilibrium quantity
• D. Price controls

Answer: (A)

Market equilibrium describes the point at which quantity demanded equals quantity supplied. At this balance, the market clears: the amount buyers want to buy matches the amount sellers want to sell, so there’s no inherent pressure for the price to move. This concept also ties together the price and the quantity that result from that balance—the equilibrium price is the specific price that clears the market, and the equilibrium quantity is the amount bought and sold at that price. When outside forces push the price away from this point, shortages or surpluses emerge, and prices tend to adjust back toward the equilibrium.