Which statement is NOT an important function of an efficient market?
A)It allocates consumption of the good to the potential buyers who most value it, as indicated by the fact that they have the highest willingness to pay.
B)It allocates sales to the potential sellers who most value the right to sell the good, as indicated by the fact that they have the lowest cost.
C)It ensures that every consumer who makes a purchase values the good less than every seller who makes a sale, so that all transactions are mutually beneficial.
D)It ensures that every potential buyer who doesn't make a purchase values the good less than every potential seller who doesn't make a sale, so that no mutually beneficial transactions are missed.

Question

Quizplus · Accepted Answer

Statement C is incorrect as it is not necessary for every consumer who makes a purchase to value the good less than every seller who makes a sale. In some cases, a buyer may value the good slightly more than a seller values the right to sell, resulting in a mutually beneficial transaction. However, in an efficient market, the aggregate demand for the good will exceed the aggregate supply, leading to a price at which all consumers who value the good more than that price can obtain it, and all sellers who value the right to sell more than that price can obtain buyers.

Which Statement Is NOT an Important Function of an Efficient