Question

Explain why the following statement is false: “In the goods market, no buyer would be willing to pay more than the equilibrium price.”

Short answer

The provided statement is incorrect since some consumers will be eager to purchase things even at greater prices.

Step-by-step solution

Definition

Goods market:

A products market is a form of market in which households and businesses or enterprises interact in the selling and acquisition of goods and services production. In this form of market, households function as purchasers and consumers, while businesses operate as sellers. The intersection of supply and demand determines the quantity and equilibrium price in the goods market. Subsidies, price floors, taxes, government controls, price ceilings, and the number of consumers and sellers all influence the types of products marketplaces that exist.

Explanation

In the goods market, the statement that no buyer would be willing to pay more than the equilibrium price is false, because the buyer would be willing to pay more to satisfy his want and satisfaction. In this situation, the consumer will purchase more than he requires until he becomes dissatisfied with the product, at which time his demand for that product will decline until it achieves zero quantity demand.