Praxis II Citizenship

Category - Economics

What is the point of intersection between the aggregate supply curve and aggregate demand curve called?
  1. Marginal price
  2. Utility
  3. Marginal cost
  4. Equilibrium
Explanation
Answer: D - The point of intersection between the aggregate supply and aggregate demand curves is the equilibrium-the combination of output and consumer desire that allows the market to remain balanced. When equilibrium is achieved, it means that competing influences are balanced. Market equilibrium is not directly affected by price; it is only affected by changes in the supply or demand for the product. Equilibrium price reflects the relationship between supply and demand andprice.
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