(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.
It is not always practical for businesses to change their prices on a daily basis in order to reflect the equilibrium price.
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A reason that market prices are not always the same as equilibrium prices is:
It is not always practical for businesses to change their prices on a daily basis in order to reflect the equilibrium price.
This captures the reality that frequent price adjustments can be logistically challenging and may not be well-received by consumers, leading businesses to maintain more stable pricing despite shifts in supply and demand.
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