Question

1. Why do businesses seek an equilibrium price?
A. It ensures that competitors cannot offer lower prices
B. It attracts the largest possible number of consumers to the business
C. It provides the highest possible prices that consumers will pay for each product
D. It prevents shortages and surpluses by producing the right number of goods for the right price.
2. What is a reason that market prices are not always the same as equilibrium prices?
A. Market prices are often set by buyers rather than by sellers
B. Supply and demand are not well-understood by business owners
C. The equilibrium is not always the most profitable price point
D. Market prices sometimes reflect the relative prices of competitors rather than equilibrium
3. How do markets keep producers from increasing prices?
A. Higher prices cause demand shifts
B. Higher prices cause supply shifts
C. Higher prices decrease quantity sold
D. Higher prices decrease consumer demand

Answer 1

A business seeks equilibrium so that as many as possible customers are attracted to the new business and use the products. This decreases the competition a little bit but improves the marketability of the product. 
However, market prices are not always in the equilibrium because of insufficient knowledge and experience of the producers, about the supply and demand issues. 
This may lead to increased price, but this ultimately decrease consumer demand and therefore, the producers are always afraid of increasing the prices of a commodity.