Question

A market is in equilibrium when A. the government sets the price high enough so that all producers can make profits. B. the government sets the price low enough so that all consumers can afford to purchase as much of the product as they want. C. there is a surplus of the product. D. the price is such that the amount consumers want to buy equals the amount producers want to sell. g

Answer 1

Answer:

D. the price is such that the amount consumers want to buy equals the amount producers want to sell.

Explanation:

A market is in equilibrium when the price is such that the amount consumers want to buy equals the amount producers want to sell.

Generally, a market is considered to be at equilibrium when the quantity of goods and services supplied by the producer is equal to the quantity of goods and services demanded by the consumers.

A direct opposite of this phenomenon is market failure. Market failure is when the market fails to produce the efficient level of output.

This ultimately implies that, a market failure arises when there is inefficiency in the distribution or allocation of goods and services in a free market. Thus, the demand of the consumer of these goods and services are not being met with the level of supply (output) required i.e the forces of demand and supply are not efficient in producing the level of output required by the economy.

Some of the causes of market failure are imperfect information, monopoly, oligopoly, externalities etc.