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Chapter 3: Q 38. (page 79)

Explain why the following statement is false: 鈥淚n

the goods market, no seller would be willing to sell for less than the equilibrium price.鈥�

Short Answer

Expert verified

This statement 鈥淚n the goods market, no seller would be willing to sell for less than the equilibrium price.鈥� is false because there are many suppliers who sell the product below equilibrium prices because of various reasons.

Step by step solution

01

Step 1. Goods market and equilibrium price.

By Goods Market, we mean all the buying and selling of goods and services.

The equilibrium price is where the supply of goods matches demand. normally in the goods, market equilibrium price and quantity are determined by the crossing or intersection of demand and supply.

02

Step 2.

Some suppliers are willing to sell their goods even at the lower prices and there are various reasons such as perishable goods which cannot be stored for long.

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