What is the market clearing price?

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Study for the IGCSE Economics CIE Section 2 on resource allocation. Practice with flashcards and multiple-choice questions, each with hints and explanations. Prepare for success!

Multiple Choice

What is the market clearing price?

Explanation:
Market clearing price is the price at which the quantity demanded equals the quantity supplied. At this point the market is balanced, so there is no pressure for the price to move and the market clears. This is the equilibrium price. If the price were above it, there would be excess supply; if it were below it, there would be excess demand, which is disequilibrium.

Market clearing price is the price at which the quantity demanded equals the quantity supplied. At this point the market is balanced, so there is no pressure for the price to move and the market clears. This is the equilibrium price. If the price were above it, there would be excess supply; if it were below it, there would be excess demand, which is disequilibrium.

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