Suppose the market price of corn is $5.50 per bushel. Which of the following is

Question

Suppose the market price of corn is $5.50 per bushel.

Which of the following is not one of the three conditions that will need to be satisfied for the corn market to be in equilibrium at this price?

A.

The cost to corn farmers of growing the corn must not be more than $5.50 per bushel.

B.

The quantity of corn produced by corn farmers will equal the quantity purchased by buyers.

C.

Both the buyers and sellers of corn could benefit by making small changes to their market behaviors.

D.

The buyers of corn will only use it for activities that they feel are worth at least $5.50 per bushel.

Explanation / Answer

Both the buyers and the sellers of corn could benefit from making small changes to their market behavior. The statement is wrong because at equilibrium the behaviors are well suited any change will cause a change in the equilibrium or it might lead to a market failure i.e. a mismatch between the demand and supply of the goods.

The answer is "C".

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