In the market for a good such as ice-cream cones:
A)an inefficient number of ice-cream cones will be produced
B)the sum of producer surplus and consumer surplus is minimised
C)price adjusts to balance supply and demand
D)people's wants are not met adequately

Question

Quizplus · Accepted Answer

In a market for a good such as ice-cream cones, the price will adjust to balance supply and demand. This means that as the demand for ice-cream cones increases, the price will rise, which will encourage producers to produce more cones, increasing the supply. Eventually, the price will reach a point where the quantity supplied equals the quantity demanded, which is the point of market equilibrium. At this point, there is no shortage or surplus of ice-cream cones, and both producers and consumers are satisfied. Therefore, the best choice is C.

In the Market for a Good Such as Ice-Cream Cones