Question

Select the correct answer.

Answer 1

Answer:

A. It is the point where the demand and supply curves Intersect.

Explanation:

Demand and supply curves determine the price of that particular product. The demand and supply curves are drawn from quantity in the horizontal axis and price in the vertical axis.

The demand can be described as the amount of goods or services that consumers buy at a given time at a particular price. The price usually dictates the quantity of goods that a consumer will be willing to buy depending on whether it is a want or need. Needs are goods or services that a consumer cannot do without, there demand are usually stable while a want is not priority that a consumer can do without. An increase in the price of a good or service for a want will definitely cause a reduction in the demand for the particular good or service since the consumers feel that they are paying too much for the service or good.

The supply can be described as the quantity of goods or services that the supplier or producer is willing to provide at a particular price. Most of the time, an increase in the price of a good or service encourages the suppliers to supply more of the goods or services to maximize on the profits.

The point at which the demand and supply curve intersect is referred to as equilibrium. At this point, the quantity demanded and the quantity supplied is equal. On the same note, the price the consumers are willing to pay, and the price the suppliers are willing to receive for that particular good or service is equal.