Question

In a perfectly competitive market, which of the

Q: Answer-In a perfectly competitive market, which of the following conditions must hold for the market to be...

Market equilibrium in a perfectly competitive market occurs when the quantity demanded by consumers equals the quantity supplied by producers at the prevailing market price. At this point, there is no excess demand or supply, and there is no pressure for the price to change.

following conditions must hold for the market to be in equilibrium?

A Quantity demanded equals quantity supplied, and there is no tendency for price to change.

B Firms are earning economic profits, incentivizing new firms to enter the market.

C There is excess demand, leading to upward pressure on prices.

D There is excess supply, leading to downward pressure on prices.

E The government sets the price at a level that ensures all goods are sold.

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