At the market-clearing price, everyone who makes a voluntary exchange is better off.

Question

Quizplus · Accepted Answer

This statement is true because the market-clearing price is determined by the intersection of the supply and demand curves, which means that at this price, the quantity demanded equals the quantity supplied. At this equilibrium point, both buyers and sellers are able to exchange goods or services at a price that they find mutually beneficial, and therefore they are better off than they would have been without the exchange.

At the Market-Clearing Price, Everyone Who Makes a Voluntary Exchange