Equilibrium exists when:
A)output is distributed equitably.
B)scarcity is eliminated.
C)an individual would be better off taking a different action.
D)no individual has an incentive to change his or her behavior.

Question

Quizplus · Accepted Answer

Equilibrium exists when no individual has an incentive to change his or her behavior. In other words, all parties are satisfied with the current situation, and there is no motivation for anyone to alter their actions or behavior. Option A is incorrect as equity does not necessarily lead to equilibrium; option B is incorrect as scarcity is a fundamental economic principle that cannot be eliminated. Option C is incorrect as equilibrium occurs when individuals are already making optimal choices, so there is no better action to take.

Equilibrium Exists When