Final answer:
Without the demand and supply schedules, it is not possible to determine the equilibrium price and quantity for the cola market from the provided options. In general, equilibrium is found where quantity demanded equals quantity supplied, but additional data is needed to find the correct answer.
Step-by-step explanation:
The equilibrium price and quantity in the cola market are identified at the point where the quantity demanded equals the quantity supplied.
Without a graph, we can determine this by examining a demand and supply schedule. The correct option would display these values as equal.
Unfortunately, the provided options (A, B, C, D) do not contain sufficient information to accurately determine the equilibrium price and quantity, as the actual demand and supply schedules are not included.
Therefore, we are unable to identify the correct equilibrium without additional data.
For instance, referring to Figure 3.4 in a textbook, if the equilibrium price is $1.40 per gallon of gasoline and the equilibrium quantity is 600 million gallons, we would find this equilibrium by locating the price on the demand and supply schedules where the quantity demanded equals the quantity supplied.
Understanding the concept of equilibrium is crucial in economics. When the market price is above the equilibrium, like in the example of $1.60 per gallon, the result is a surplus as the quantity supplied exceeds the quantity demanded.
This is due to the laws of demand and supply, which state that a higher price leads to lower demand and greater supply.
The ceteris paribus principle is also fundamental when analyzing the effects of changes in the market, such as the impact of price fluctuations on demand and supply.