Asked by razan osman on May 11, 2024

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Prices above equilibrium on agricultural products like milk exist to maximize the consumer surplus.

Consumer Surplus

The differential between consumers’ readiness to pay a certain amount for a service or good and the payment completed.

Equilibrium

The condition in a market where the quantity demanded equals the quantity supplied, leading to no inherent force for price change.

  • Determine the importance of price points as signals in market economies.
  • Gain an understanding of the influence market equilibrium has on efficiency and total surplus.
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jashan SandhuMay 13, 2024
Final Answer :
False
Explanation :
Prices above equilibrium on agricultural products like milk decrease consumer surplus by forcing consumers to pay more for the product, potentially leading to market inefficiencies such as shortages and surpluses. Prices at equilibrium maximize both consumer and producer surplus.