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Chapter 3: Q 37. (page 79)

Explain why the following statement is false: 鈥淚n the goods market, no buyer would be willing to pay

more than the equilibrium price.鈥�

Short Answer

Expert verified

This statement 鈥淚n the goods market, no buyer would be willing to pay more than the equilibrium price.鈥� Is false because there are exceptions to this statement.

Step by step solution

01

Step 1.Equilibrium price.

Equilibrium is the state in which market supply and demand balance each other, and as a result, prices become stable. The equilibrium price is the price where the supply of goods goes with the demand of the goods.

And there are different types of goods market depend upon various factors.

02

Step 2.

The given statement is false because there would be some people who will be willing to buy goods even at the higher prices maybe they earn more than the equilibrium price, there are always exceptions. At the equilibrium price, it is not necessary that the number of buyers and sellers are equal.

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