Why do businesses seek an equilibrium price?
(1 point)
Responses
It ensures that competitors cannot offer lower prices.
It attracts the largest possible number of consumers to the business.
It provides the highest possible prices that consumers will pay for each product.
It prevents shortages and surpluses by producing the right number of goods for the right price.
It prevents shortages and surpluses by producing the right number of goods for the right price.
The correct answer is:
- It prevents shortages and surpluses by producing the right number of goods for the right price.
Businesses seek an equilibrium price because it allows them to determine the optimal price for their products or services. An equilibrium price refers to the point at which the supply of a product matches the demand for that product, resulting in neither a shortage nor a surplus. By setting the price at this equilibrium level, businesses can ensure that they produce and sell the right number of goods at the right price, avoiding the inefficiencies and financial losses associated with shortages or surpluses.
The correct answer is:
It prevents shortages and surpluses by producing the right number of goods for the right price.
Explanation:
Businesses seek an equilibrium price because it helps them avoid shortages and surpluses in the market. The equilibrium price is the market price at which the quantity demanded by consumers matches the quantity supplied by producers. This balance ensures that the right number of goods are produced at the right price, preventing situations where there are either too many products (resulting in a surplus) or too few products (resulting in a shortage).
When businesses find the equilibrium price, they can adjust their production and pricing strategies to meet the demand of consumers effectively. By producing an optimal quantity of goods at the equilibrium price, businesses can maximize their profits while meeting the needs and preferences of their customers. This is a desirable outcome for businesses as it allows for smoother operations, minimizes waste, and fosters stability in the market.