Why do economists emphasize the importance of equilibrium in markets?

Question

Quizplus · Accepted Answer

Economists emphasize the importance of equilibrium in markets because the behaviour of buyers and sellers will automatically guide the market toward the equilibrium price and quantity. The market mechanism of supply and demand will ensure that prices adjust to balance the quantity of goods and services supplied with the quantity demanded, which leads to an efficient allocation of resources. While choice C is also a reason for the importance of equilibrium, it may not always be true as some buyers or sellers may have different preferences or expectations. Choice A is not entirely correct as trading can occur at other prices and quantities, but usually in smaller quantities or in secondary markets. Choice D is not accurate as equilibrium represents a point where both sellers and buyers have reached an agreement, not a compromise between them.

Why Do Economists Emphasize the Importance of Equilibrium in Markets