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Explain Why an Equilibrium Point in a Free Market Is

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Essay

Explain why an equilibrium point in a free market is considered to be the socially efficient point. Sketch graph a situation where a government price ceiling below equilibrium leads to inefficiency. Explain in words why the inefficiency exists and shade in on your graph the lost benefit that creates the inefficiency.


Definitions:

Time Utility

The enhancement of a product's or service's value by making it available at a time that is convenient or desirable for consumers.

Place Utility

The value added to products by having them in a location where they are accessible to potential buyers.

Digital Marketspace

An online environment where goods and services are traded, leveraging digital technologies for advertising, sales, and customer engagement.

Digital

Pertaining to technology that generates, stores, and processes data in terms of two states: positive and non-positive. Digital technology includes the internet, mobile computing, and smart devices.

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