Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 14

Another way to describe the equilibrium in Figure is to say that at P * , Q * neither the supplier nor the demander has any incentive to change behavior. Use this notion of equilibrium to explain:
1. Why the fact that P * , Q * occurs where the supply and demand curves intersect implies that both parties to the transaction are content with this result; and
2. Why no other P, Q point on the graph meets this definition of equilibrium.
Figure The Marshall Supply-Demand Cross