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10 October, 09:17

Which of the following statements is true? In market equilibrium:

a. There are uncomsummated wealth destroying transactions

b. There are unconsummated value creating transactions

c. None of these

d. There are no unconsummated wealth creating transactins

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  1. 10 October, 09:47
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    Answer: d. There are no unconsummated wealth creating transactions

    Explanation:

    In an equilibrium, a price has been reached that everyone is satisfied with. This is why there are no unconsummated wealth creating transactions.

    The market has managed to bring together people who are want a certain good more than they will pay for it and sellers who value the good less than they will receive for it. The Equilibrium therefore sets a price that is fair on both these people which will mean that they will not be able to unfairly trade with one another. The person who values the good more than they can pay will be able to pay the person who values the goods less than they will receive. Equilibrium has brought them to a middle ground.
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