alleryIn market analysis, the price at which the quantity demanded of a commodity exactly equals the quantity supplied is termed the:
AReservation price
BEquilibrium price
CAccounting price
DProcurement price
Answer & Solution
Correct answer: B. Equilibrium price
1. The market clears when buyers' total purchases equal sellers' total sales.
2. At this single price there is neither unsold stock nor unmet demand.
3. This market-clearing price is called the equilibrium price, so option B is correct.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit II "Determination of Prices", p.2_
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