Economists believe that markets generally are efficient What

Economists believe that markets generally are “efficient.” What does this mean and why do they believe it? Use Consumer Surplus, Producer Surplus, and Total Consumer Surplus to fully answer this question.

Solution

There is always an equilibrium price around which marketers need to frame the strategy. They always keeps regulating the price around it in accordance with the demand. If demand is high they quote is above the equilibrium price which is called as producer surplus and as soon as the demand falls they reduxe the price which gives people leverage to pirchase it but in this case the consumer gets the surplus. Once the demand is restored the vicious cycle is again restored