Question

If a person is willing to trade one good for another, their new basket after the trade must lie on a lower indifference curve than their original basket. True or False

Answer 1

Buyers can be willing to pay more than the equilibrium price in the goods market.

Step-by-step explanation:

The statement is false. In the goods market, buyers can be willing to pay more than the equilibrium price. The equilibrium price is determined by the intersection of the demand and supply curves.

It represents the price at which the quantity demanded equals the quantity supplied. Buyers in the goods market can be willing to pay more than the equilibrium price if they value the good or service more than what is being offered at the equilibrium price.