Considering the definition of dynamic equilibrium, the correct answer is second option: Nitrogen and hydrogen combine at the same rate that ammonia breaks down.
Chemical equilibrium is a state of a reaction in which no changes are observed as time passes, even though the reaction continues. That is, the chemical equilibrium is established when there are two opposite reactions that take place simultaneously at the same speed.
So, dynamic equilibrium is a chemical equilibrium, which occurs when two reversible processes happen at the same speed in both directions. In this way, the concentrations of the reactants and products remain constant over time.
In summary, the correct answer is second option: Nitrogen and hydrogen combine at the same rate that ammonia breaks down.
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