Why do businesses seek an equilibrium price it ensures that competitors cannot offer lower prices it attracts the largest possible number of consumers to the businesses it provides the highest possible prices that consumers will pay for each product it prevent storage is and supplies I producing the right number of goods for the right price
Businesses seek an equilibrium price because it attracts the largest possible number of consumers to the businesses. When the price is too high, it may deter customers from purchasing the product, and when the price is too low, it may cause customers to question the quality or value of the product.
By finding the equilibrium price, businesses can strike a balance where the price is affordable enough to attract a large customer base while still generating enough revenue to cover costs and maintain profitability. This helps in maximizing sales and capturing a larger market share.
Additionally, maintaining equilibrium in pricing also aids businesses in planning their production and supply chain. When demand matches supply at the equilibrium price, it prevents overproduction or underproduction of goods, avoiding excessive storage costs or losing potential sales due to shortages.
While businesses do aim to charge the highest possible prices that consumers are willing to pay, this is usually achieved by understanding consumer preferences, market demand, and existing competition rather than simply charging exorbitant prices.