Question

A company sold merchandise with a cost of $7,200 for $12,000 on account. The seller uses the perpetual inventory system. The entry to record the sale would be

a) True
b) False

Answer 1

Buyers may be willing to pay more than the equilibrium price in certain situations, such as when the product is scarce or in high demand. False.

Step-by-step explanation:

The statement ‘In the goods market, no buyer would be willing to pay more than the equilibrium price’ is false. In the goods market, the equilibrium price is determined by the intersection of the supply and demand curves. This price represents the point where the quantity supplied equals the quantity demanded. However, buyers may be willing to pay more than the equilibrium price in certain situations, such as when the product is scarce or in high demand.

For example, during a shortage of a particular product, buyers may be willing to pay a higher price to obtain it. This is known as a price above the equilibrium price, or a premium. The willingness of buyers to pay more in these situations can create opportunities for sellers to charge higher prices and make additional profit.

In conclusion, the statement is false because buyers can be willing to pay more than the equilibrium price under specific conditions, such as scarcity or high demand.