What is a reason that market prices are not always the same as equilibrium prices?
(2 points) Responses Market prices are often set by buyers rather than by sellers. Market prices are often set by buyers rather than by sellers. Supply and demand are not well-understood by business owners. Supply and demand are not well-understood by business owners. The equilibrium is not always the most profitable price point. The equilibrium is not always the most profitable price point. It is not always practical for businesses to change their prices on a daily basis in order to reflect the equilibrium price.
One reason that market prices are not always the same as equilibrium prices is that market prices are often set by buyers rather than by sellers. Buyers may be willing to pay higher or lower prices depending on their preferences, purchasing power, or urgency. This can result in market prices that deviate from the equilibrium price determined by the intersection of supply and demand.
Another reason is that supply and demand may not be well-understood by business owners. They may not have accurate information or may not accurately assess the current market conditions, leading to prices that do not align with the equilibrium price.
Furthermore, the equilibrium price is not always the most profitable price point for businesses. They may choose to set their prices higher or lower than the equilibrium to maximize their profits or to gain a competitive advantage in the market.
Lastly, it is not always practical for businesses to change their prices on a daily basis to reflect the equilibrium price. It can be costly and time-consuming to adjust prices frequently, especially for businesses with large product portfolios or complex pricing strategies. Therefore, market prices may remain stable or deviate from the equilibrium in the short term.