The market equilibrium for a commodity is determined by:
- AOption (a)
The market supply of the commodity.
- BOption (b)
The balancing of the forces of demand and supply for the commodity.
- COption (c)
The market demand of the commodity
- DOption (d)
The intervention of the Government
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Correct answer
The balancing of the forces of demand and supply for the commodity.
Why this answer is correct
The correct answer is option 2 i.e The balancing of the forces of demand and supply for the commodity.
- 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.
- Thus the market equilibrium for a commodity is determined by balancing the forces of demand and supply for the commodity.