Question 6
MediumOriginal questionWhy is the equilibrium price called a stable price?
Show the answer and explanation
CorrectNot quiteAnswer A
Correct answer: A
Explanation
Above it, unsold stock makes sellers cut prices; below it, unmet demand makes buyers bid prices up.
So the market keeps returning to the equilibrium until demand or supply itself changes.
Worth noting
The equilibrium does move when demand or supply shifts; it is stable, not fixed.
- Concept
- Stability of equilibrium
- Typical timeTypical
- 70 s
- Your timeYours
- —
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