Without government regulations, the equilibrium price is established _____ .

The equilibrium price in a market is established when the quantity of goods supplied equals the quantity of goods demanded. This point is crucial because it reflects a balance in the market where consumers are willing to purchase the exact amount of the product that producers are willing to sell at that price. At equilibrium, there is neither surplus nor shortage; hence, prices tend to stabilize.

In a setting without government regulations, the forces of supply and demand solely determine this equilibrium price naturally through market interactions. As buyers compete to purchase products, demand can increase, prompting suppliers to adjust their prices and output until a new equilibrium is found. Similarly, if the supply of a product increases without a corresponding increase in demand, prices will lower until the market reaches equilibrium again.

This natural adjustment process illustrates the importance of market dynamics in establishing prices, and why the statement regarding equilibrium being established when supply equals demand is fundamentally correct.