Question

question 4
if one seller in a competitive market sets his price higher than the equilibrium price:

• customers will buy only from him because they think his product is of higher quality.
• most customers will buy from him because he is conveniently located.
• customers will shun him until goods selling at the lower price are all gone.
• the government will require all other competitors to raise their price to equal his price.

10 pts

Explanation:

In a competitive market, if a seller sets a price above the equilibrium price, customers have many alternatives. They will not be compelled to buy from this seller due to the availability of similar - priced or lower - priced goods from competitors. There is no government intervention to equalize prices, and customers are not likely to assume higher quality just because of a higher price. Convenient location alone is not enough to make most customers buy from a high - priced seller in a competitive market.

Answer:

None of the above options are correct as customers will generally not buy from a seller with a price above equilibrium in a competitive market due to the presence of alternatives.