Final answer:
Market equilibrium is characterized by supply and demand meeting at a specific price and quantity, which are known as the equilibrium price and quantity. It is not defined by supply exceeding demand or occurring at points only on one of the curves.
Step-by-step explanation:
During market equilibrium, several events occur:
- Supply and demand meet at a specific price.
- Supply and demand meet at a specific quantity.
This specific price and quantity where supply and demand curves meet is called the equilibrium price and equilibrium quantity. At this point, the quantity of goods that buyers are willing and able to purchase exactly equals the quantity that sellers are willing to supply. If the price is set above this point, there will be an excess supply or surplus; if it's below, there will be excess demand or a shortage. In both cases, economic pressures will naturally move the market back towards the equilibrium.
Let's address each part of the question:
- Supply and demand do indeed meet at a specific price at equilibrium.
- Supply and demand also meet at a specific quantity at equilibrium. This is essentially what defines the market equilibrium.
- An equilibrium is not characterized by supply slightly exceeding demand, nor is it a point on just the demand or supply curve alone. It is the intersection point of both curves.