The equilibrium price, where supply and demand intersect, is at 40, representing the point of balance between buyers and sellers in the market.Thus the correct option is:c. 40
The point of equilibrium is where the supply and demand curves intersect. At this intersection, the quantity supplied equals the quantity demanded, resulting in a stable market price. Looking at the options provided, option c. 40 is the price at the point where supply and demand are in balance. In this market scenario, buyers are willing to purchase the quantity supplied at a price of 40, and producers are willing to supply that quantity at the same price. Therefore, 40 is the equilibrium price where the market is in equilibrium.
The equilibrium price is a crucial concept in economics as it signifies the state of balance between supply and demand forces. If the price were below the equilibrium point, there would be excess demand, leading to shortages. Conversely, if the price were above the equilibrium, there would be a surplus, resulting in unsold goods.
The equilibrium price is dynamic and can shift based on changes in factors affecting supply and demand. It reflects the optimal point at which market participants find mutually agreeable terms for transactions, ensuring a stable and efficient allocation of resources in the market.Thus the correct option is:c. 40