Which phrase is an example of economic equilibrium?

• A. The quantity demanded exceeds the quantity supplied
• B. The price is stable despite shifts
• C. The market experiences excess demand
• D. The quantity demanded is equal to the quantity supplied

Answer: (D)

Economic equilibrium happens when the quantity buyers want to purchase exactly matches the quantity sellers are willing to offer, so the market clears and the price tends to stabilize. That matching of quantities is what the phrase describes. When quantity demanded exceeds quantity supplied, a shortage occurs and prices rise to restore balance. When there is excess supply, the market has a surplus and prices fall. A statement about price stability despite shifts doesn’t by itself define equilibrium, since shifts in supply or demand move the equilibrium point even if the price momentarily seems steady. So, the situation where quantity demanded equals quantity supplied best captures economic equilibrium.