The particular price that results in quantity supplied being equal to quantity demanded is the best price because it maximises:
A)costs of the seller
B)the total welfare of buyers and sellers
C)the expenditure of buyers
D)the profit of buyers

Question

Quizplus · Accepted Answer

The particular price that results in quantity supplied being equal to quantity demanded is also known as the equilibrium price. This price ensures that both buyers and sellers are able to engage in transactions that maximise their welfare. At this price, buyers are able to purchase the quantity of goods they desire at a price they are willing to pay, while sellers are able to sell the quantity of goods they want to sell at a price that covers their costs and provides them with a profit. Therefore, choice B, which states that the equilibrium price maximises the total welfare of buyers and sellers, is the correct answer.

The Particular Price That Results in Quantity Supplied Being Equal