An Equilibrium

question 73

Multiple Choice

An equilibrium:

• A)is a condition that is reached eventually in any market.
• B)is a state that will continue indefinitely as long as exogenous factors remain unchanged.
• C)is a concept that is often meaningless because most markets never reach equilibrium.
• D)is a temporary state.

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Definitions:

Price

The cost associated with purchasing a particular product or service.

Budget Constraint

The limitations on the consumption bundle that a consumer can afford given their income and the prices of goods and services.

Household's Income

The total annual income received by all members of a household, including wages, salaries, benefits, and other sources of income.

Homogeneous Products

Goods that are identical in quality and cannot be distinguished from one another by consumers.