In a market system, how are the terms of exchange established?
a. Industry associations set up acceptable price ranges for their goods, and firms within each industry are required to set price within its relevant range.
b. The forces underlying supply and demand interact to set a price
c. Federal and state legislation establish minimum and maximum prices.
d. Consumer advocacy groups establish fair prices for items, and most firms comply because they don’t want to anger their customers.
Answer: b. The forces underlying supply and demand interact to set a price
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Since the 1970s, the incidence of obesity has risen from 15% of the U.S. population to
a. 20%. b. 25%. c. 30%. d. 35%. e. 50%. 12.Part of the cause of obesity is that food is cheaper; when something is cheaper a. The demand curve slopes upward. b. The demand curve slopes downward. c. Consumers demand more d. Consumers demand less e. Both b and c are correct.
Most firms have very little flexibility in their choice of input proportions.
Answer the following statement true (T) or false (F)