Trade will take place:
A)if the maximum that a consumer is willing and able to pay is less than the minimum price the producer is willing and able to accept for a good.
B)if the maximum that a consumer is willing and able to pay is greater than the minimum price the producer is willing and able to accept for a good.
C)only if the maximum that a consumer is willing and able to pay is equal to the minimum price the producer is willing and able to accept for a good.
D)none of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

Trade can only occur when the maximum price a consumer is willing and able to pay is higher than the minimum price the producer is willing and able to accept for the good. This is known as the market price where both the consumer and producer benefit from the transaction. Option A is incorrect because there is no incentive for the producer to sell if they cannot receive a price higher than their minimum acceptable price. Option C is incorrect because there is no incentive for the consumer to buy if they can purchase the good for a lower price. Option D is incorrect because one of the other options must be true for trade to take place.

Trade Will Take Place