Suppose purchases do not occur because the value of the good to the potential seller exceeds the value to a potential consumer.This situation will occur in:
A)a market dominated by government regulation.
B)well-functioning markets.
C)a market made up of many buyers and sellers.
D)a centralized market system.

Question

Quizplus · Accepted Answer

In a well-functioning market, the prices of goods are determined by the forces of supply and demand. If a seller values their good higher than a potential buyer, they would offer it at a price that reflects their valuation. If there are no buyers willing to pay that price, the seller would either have to lower their price or hold onto the good. Therefore, in a well-functioning market, purchases do not occur only if the price is too high for potential buyers, not because of government regulation or a centralized market system.

Suppose Purchases Do Not Occur Because the Value of the Good