In the market for a good like ice-cream cones:
A) an inefficient number of ice-cream cones will be produced
B) the sum of producer surplus and consumer surplus is minimised
C) price adjusts to balance supply and demand
D) people's wants are not met adequately

Question

Quizplus · Accepted Answer

Price adjusting to balance supply and demand is a fundamental concept in the market for goods. In the case of ice-cream cones, if there is excess demand, the price will rise, incentivising more producers to enter the market and increase supply until the price reaches equilibrium. On the other hand, if there is excess supply and not enough demand, the price will decrease until enough consumers are willing to purchase the cones, and the market reaches equilibrium. This mechanism ensures that the market produces the most efficient number of ice-cream cones, balancing the needs and wants of both producers and consumers.

In the Market for a Good Like Ice-Cream Cones