Answer:
The correct answer is option (c).
Explanation:
Equilibrium price occurs at the intersection of the demand and supply curves. That is, a particular quantity that both the supplier and the buyer are willing to exchange at a particular price.
At any price below the equilibrium price, quantity demanded would be more than the quantity supply, so this scenario creates a shortage (excess demand), so producers would be willing to sell the limited quantity at a higher price, preferably at the equilibrium price.
At any price above the equilibrium price, the quantity supply would be more than the quantity demanded, so there would be a surplus (excess supply) in the market. Producers would be willing to collect a lower price, preferably the equilibrium price.
