Chapter 2R, Problem 10MCQ

To determine

The question requires us to determine the equilibrium price and quantity in the corn market.

Explanation of Solution

The equilibrium is the economic situation where the market is clear, and any deviation from the equilibrium point will lead to a worse-off situation for the producers and consumers. Generally, the market achieves the equilibrium state at the intersection point of the market demand curve and supply curve.

At the equilibrium price, Quantity demanded equals the quantity supplied means there is no shortage or surplus of the product at this point.

In the given graph, point E represents the equilibrium point for the corn in the market where:

Equilibrium price = $3 per bushel

Equilibrium quantity = 1000 units.

Thus, Option “c” is correct.