At the equilibrium price in a competitive market, what is the relationship between quantity demanded and quantity supplied?

Introduction / Context:
Market equilibrium is a core concept in microeconomics. It explains how the interaction of demand and supply determines the price and quantity traded in a competitive market. The question asks what happens at the equilibrium price, a term that indicates a situation where there is no tendency for change in price under perfect competition.

Given Data / Assumptions:

• We are considering a competitive market with many buyers and sellers.
• Demand and supply schedules determine how much buyers want to purchase and sellers want to sell at different prices.
• Equilibrium price is defined as the price at which the market settles.
• Other factors such as government intervention are assumed absent.

Concept / Approach:
The equilibrium price is the price at which quantity demanded equals quantity supplied. At this price, all buyers who are willing and able to buy at that price can purchase the good, and all sellers willing and able to sell at that price can sell their planned quantity. There is no excess demand or excess supply, and therefore no pressure for the price to move up or down.

Step-by-Step Solution:
1. Draw or imagine a demand curve that slopes downward and a supply curve that slopes upward.2. The point where these two curves intersect represents the equilibrium price and equilibrium quantity.3. By construction, at this intersection point, the quantity on the demand curve equals the quantity on the supply curve.4. This means that at the equilibrium price, buyers and sellers are in balance and there is no unsold output or unsatisfied demand.5. Therefore, the correct relationship is that quantity demanded equals quantity supplied at the equilibrium price.

Verification / Alternative check:
Consider what happens if the price is above or below equilibrium. If price is set above equilibrium, quantity supplied exceeds quantity demanded, creating excess supply, and sellers lower price to clear stocks. If price is set below equilibrium, quantity demanded exceeds quantity supplied, creating excess demand, and buyers bid the price up. Only at the equilibrium price are these pressures absent, which confirms that equilibrium occurs where quantity demanded equals quantity supplied.

Why Other Options Are Wrong:
Option B: If quantity demanded is greater than quantity supplied, there is excess demand, which occurs when price is below equilibrium, not at equilibrium.
Option C: A price elasticity of demand equal to one may occur at a certain point on the demand curve but is not a condition that defines equilibrium.
Option D: Elasticities of demand and supply may or may not be equal at equilibrium; this is not a requirement for equilibrium.
Option E: If quantity supplied is greater than quantity demanded, there is excess supply, which occurs when price is above equilibrium, not at equilibrium.

Common Pitfalls:
Students sometimes overcomplicate equilibrium by focusing on elasticity or other advanced topics, but the basic condition is simple: intersection of demand and supply. Another pitfall is thinking that equilibrium is always fair or optimal; in reality, equilibrium describes a state where the market clears, not necessarily one where outcomes are equitable. For exam purposes, focus on the balance of quantities as the defining feature of equilibrium price.

Final Answer:
At the equilibrium price, quantity demanded is equal to quantity supplied.