Question

How do businesses determine the equilibrium price of a good or service?

A. They set a price that matches the expenses they take on to create
supply.
B. They set a price where the demand is less than the quantity the
are willing to supply.
C. They set a price where the demand matches the quantity they are
willing to supply
D. They set a price where the demand exceeds the quantity they are
willing to supply.

Answer 1

C. They set a price where the demand matches the quantity they are

willing to supply

Step-by-step explanation:

The equilibrium price is the current market price as determined by supply and demand forces. It is the price at which buyers are happy to buy the entire supplied quantities. Suppliers are also happy to sell that quantity at the set price. The equilibrium price is, therefore, the intersection of the demand and supply curves.

At the equilibrium price, there is no excess or short supply of a product in the market.