Read the following statements - Assertion (A) and Reasoning (R):
ASSERTION: Graphically, an equilibrium is a point where the market supply curve intersects the market demand curve
REASONING: The market demand equals market supply in equilibrium.
From the given alternatives choose the correct one:
Answer & explanation
Correct answer: option 1
In equilibrium, market demand is equal to market supply. So graphically put, equilibrium is attained at a point where market demand curve and market supply curve intersect each other.