question archive If equilibrium is compatible with both buyers' and sellers' intentions, how can this be undesirable?C

If equilibrium is compatible with both buyers' and sellers' intentions, how can this be undesirable?C

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If equilibrium is compatible with both buyers' and sellers' intentions, how can this be undesirable?C

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If Equilibrium is Compatible with both Buyer's and Seller's Intentions, This can Be Undesirable if the stakeholders will choose to exert exogenous influences to steer markets to a level that, while not efficient, will have benefits that outweigh the markets tend toward efficiency. This shows that the point of equilibrium is undesirable.

A good example is if a government, or another stakeholder, decides that the price of wheat should be kept low to encourage its use as alternate food, this could mandate a price that is lower than that which is the equilibrium price to produce the desired effect. However, there will likely be unintended consequences of the actions. It is for others to argue whether these unintended consequences outweigh any increases in the perception of the public good.