As a farmer, Gary Forsythe is familiar with the economics of perfect competition. How is the price at which he sells his corn determined?
A) It is determined by Gary because he has the product that many people want.
B) The price is determined by combining the actions of all buyers and all sellers together.
C) The price he will receive is primarily determined by the buyer at the local grain bin.
D) The government sets the price of the corn to level the playing field for everyone.
E) The price will be approximately 25 percent higher than what other farmers are selling the same corn for because Gary is an astute businessperson.

Question

Quizplus · Accepted Answer

The price of Gary's corn is determined by the market forces of supply and demand, which is the combination of actions of all buyers and sellers together in a perfect competition market. Since there are many buyers and sellers of corn, no single individual can determine the price on their own. Instead, the price is determined by the collective actions of all market participants.

As a Farmer, Gary Forsythe Is Familiar with the Economics