Which of the following best describes equilibrium?
A) A situation where the government intervenes to allocate resources
B) A situation where only one individual or firm makes an optimal decision
C) A situation where no economic agent would benefit by changing his or her behavior
D) A situation where economic agents do not optimize as they do not have perfect information

Question

Quizplus · Accepted Answer

Equilibrium occurs when the market achieves a state where no economic agent, whether it's consumers, producers, or the government, would benefit by changing their behavior. This means that all resources are allocated efficiently and price is at a point where supply equals demand. Option A does not describe equilibrium but instead describes government intervention. Option B is incorrect because equilibrium involves all economic agents, not just one. Option D is incorrect as agents in equilibrium always aim to optimize their behavior based on the available information.

Which of the Following Best Describes Equilibrium