Final answer:
The equilibrium quantity and price in the market for green peppers are 600 units and $1.40, respectively. Equilibrium is reached when the quantity supplied equals the quantity demanded, ensuring market stability without excess supply or demand.
Step-by-step explanation:
The question is about finding the equilibrium quantity and price in the market for green peppers based on the provided demand and supply relationships. In economic terms, equilibrium occurs when the quantity demanded is equal to the quantity supplied. The information given states that at an equilibrium price of $1.40, the equilibrium quantity is 600.
If the price were to rise to $1.80, there would be excess supply, meaning suppliers are willing to sell more green peppers than consumers are willing to buy at that price point.
Conversely, if the price drops to $1.20, the market would experience excess demand, where consumers want to buy more than suppliers are willing to provide at that price. Thus, the equipilibrium ensures a balance with no excess supply or demand.
Understanding market equilibrium is vital as it determines the point where market forces are balanced and can be analyzed with models of supply and demand curves. Prices above or below the equilibrium lead to an imbalance causing surpluses or shortages. Practically, this concept helps businesses and consumers to predict market behavior and make informed decisions.