Which of the following is not a characteristic of a nonclearing market?
A) Economic agents react to price signals only
B) Economic agents react to price and quantity signals
C) A disequilibrium in one market can create spillover effects in a related market
D) A presence of excess demand or excess supply

Question

Quizplus · Accepted Answer

In a nonclearing market, economic agents react to both price and quantity signals, not just price signals alone. This means that characteristics B (economic agents react to price and quantity signals), C (a disequilibrium in one market can create spillover effects in a related market), and D (a presence of excess demand or excess supply) are all features of nonclearing markets. Choice A is incorrect because it describes a scenario where economic agents react only to price signals, which is more characteristic of a clearing market where prices adjust to equate supply and demand.

Which of the Following Is Not a Characteristic of a Nonclearing