Economic equilibrium is described as which of the following statements?

• A. Market failure
• B. Disequilibrium
• C. Elasticity
• D. Economic equilibrium

Answer: (D)

Economic equilibrium is the state where quantity supplied equals quantity demanded, and the market clears at a price that balances buyers’ wants with sellers’ offerings. At this point, there’s no inherent pressure for the price to move, assuming other factors stay the same. If the price were higher than this level, a surplus would push prices down until supply and demand line back up. If the price were lower, a shortage would push prices up for the same reason. This balance is what distinguishes equilibrium from other concepts. Market failure describes a situation where markets don’t allocate resources efficiently due to externalities, public goods, or information problems. Disequilibrium means the market isn’t balanced and is adjusting toward equilibrium. Elasticity is about how responsive quantity demanded or supplied is to price changes, not the state of balance itself.