Laboratory experiments by Vernon Smith support:
A) the supply and demand model's usefulness in predicting changes in a free market.
B) a market equilibrium where the quantity supplied always exceeds the quantity demanded.
C) a market equilibrium where the quantity demanded always exceeds the quantity supplied.
D) suspicions that a market equilibrium does not exist in the real world.

Question

Quizplus · Accepted Answer

Vernon Smith's laboratory experiments support the usefulness of the supply and demand model in predicting changes in a free market. He demonstrated how market participants adjust their behavior to changes in supply and demand, leading to a market equilibrium where the quantity supplied equals the quantity demanded.

Laboratory Experiments by Vernon Smith Support