The intersection of the market demand and supply curves for a commodity determines __________.

The equilibrium price

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The equilibrium quantity

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The point of neither surplus nor shortage for the commodity

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All the above

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Solution

The correct option is D All the above
The intersection of the market demand and supply curves for a commodity determines the equilibrium price, quantity and the point of neither surplus nor shortage of commodity. This can be understood with the help of the graph where equilibrium is set at the price of 3000 and quantity at 6 units.

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Similar questions

(i) Calculate the equilibrium price and quantity for the demand and supply curves of a particular commodity given by Qd=10-p and Qs=p
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Suppose the demand and supply curves of a commodity 'X' in a perfectly competitive market are given by:
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Suppose the demand and supply curve of commodity X in a perfectly competitive market are given by:

q^D = 700 − p

q^S = 500 + 3p for p ≥ 15

= 0 for 0 ≤ p <15

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