The opportunities for additional mutually beneficial exchanges cease only if
A) the price exceeds the equilibrium price.
B) the price is less than the equilibrium price.
C) the government intervenes in the market.
D) firms make an agreement to stop selling additional units.
E) the price equals the equilibrium price.

Question

Quizplus · Accepted Answer

The law of supply and demand states that there will be additional mutually beneficial exchanges as long as the price is not at the equilibrium price. Once the price reaches the equilibrium point, both buyers and sellers are satisfied and there are no further mutually beneficial exchanges to be made at that price. Therefore, the best answer is E, the price equals the equilibrium price.

The Opportunities for Additional Mutually Beneficial Exchanges Cease Only If