question archive There is a statement that says, "In any market, the equilibrium of supply and demand maximizes the total benefits received by all buyers and sellers combined
There is a statement that says, "In any market, the equilibrium of supply and demand maximizes the total benefits received by all buyers and sellers combined
Subject:MarketingPrice:2.88 Bought3
There is a statement that says, "In any market, the equilibrium of supply and demand maximizes the total benefits received by all buyers and sellers combined." How is this statement true? Explain.
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
This statement is true. Total benefits are typically defined by the total surplus, which is the sum of the consumer surplus (the benefit to the buyer) and producer surplus (the benefit to the seller). The total surplus is maximized when the market is in equilibrium. If the quantity is greater than or less than the equilibrium quantity, total surplus will not be maximized, which will create "dead-weight loss."
