Question

Equilibrium means a situation where __________.

• A. the plans of all consumers and firms in the market match and the market clears
• B. the aggregate quantity that all firms wish to sell equals the quantity that all the consumers wish to buy
• C. market supply equals market demand
• D. all of the above

Answer 1

The correct option is D all of the above

Market equilibrium is attained where the market demand is equal to the market supply, thus, the buyers and the sellers don't intend to change their behaviour at the equilibrium position. At the equilibrium level the aggregate quantity supplied, i.e, the plan of the producers matches the aggregate demand, i.e, the plans of the consumer, hence, the market clears.