BuyFind

ECON MACRO

5th Edition
William A. McEachern
Publisher: Cengage Learning
ISBN: 9781337000529
BuyFind

ECON MACRO

5th Edition
William A. McEachern
Publisher: Cengage Learning
ISBN: 9781337000529

Solutions

Chapter
Section
Chapter 4, Problem 6.13P
Textbook Problem

(Market Equilibrium Determine) whether each of the following statements is true, false, or uncertain. Then briefly explain each answer.

  1. In equilibrium, all sellers can find buyers.

  • In equilibrium, there is no pressure on the market to produce or consume more than is being sold.
  • At prices above equilibrium, the quantity exchanged exceeds the quantity demanded.
  • At prices below equilibrium, the quantity exchanged is equal to the quantity supplied
  • Expert Solution
    To determine

    If the given statements as True, false, or uncertain and explanation for each option chosen.

    Concept Introduction:

    Market equilibrium: Market equilibrium is the situation when there is no shortage or excess demand, there is no surplus or excess supply which implies quantity supplied equals quantity demanded. Anyone who wants to buy at the current price can and all producers who want to sell at that price can.

    Explanation of Solution

      a. In equilibrium, all sellers can find buyers. −True

    Market equilibrium is the situation when there is no shortage or excess demand, there is no surplus or excess supply which implies quantity supplied equals quantity demanded. So, all products are sold at the existing market price.

      b. In equilibrium, there is no pressure on the market to produce or consume more than is being sold.- True

    As there is no excess demand or excess supply is the market, so there is no pressure on the market to produce or consume more than is being sold.

      c. At prices above equilibrium, the quantity exchanged exceeds the quantity demanded.--False

    At a high price above equilibrium, the quantity supplied exceeds the quantity demanded...

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