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Question

When is a market in equilibrium?
  1. Quantity demanded equals quantity supplied
  2. Excess demand and excess supply are zero
  3. The market clears at the equilibrium price
  4. All of the above

A
Excess demand and excess supply are zero
B
All of the above
C
The market clears at the equilibrium price
D
Quantity demanded equals quantity supplied
Solution
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Market equilibrium is a market state where the supply in the market is equal to the demand in the market. The equilibrium price is the price of a good or service when the supply of it is equal to the demand for it in the market. If a market is at equilibrium, the price will not change unless an external factor changes the supply or demand, which results in a disruption of the equilibrium.

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