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Homework answers / question archive / The intersection of the supply and demand curves is called the _____ price and is special because at that price _____
The intersection of the supply and demand curves is called the _____ price and is special because at that price _____.
a. Producer, the market clears
b. Equilibrium, all consumer incomes are equal
c. Producer, returns to factors are identical
d. Equilibrium, market supply exactly equals demand
Ans: Equilibrium, market supply exactly equals demand
Explanation:
The point where the demand and supply intersects is called the equilibrium point. At this equilibrium point the supply is equal to demand. The price which is determined at this point is called equilibrium price and the quantity is called equilibrium quantity.
Thus, option d is correct answer.
