The value customers place on a product and the prices charged for competing products affect demand and the cost of producing and delivering the product affect supply.

Question

Quizplus · Accepted Answer

This statement accurately describes how demand and supply interact in a market economy. Customers' willingness to pay for a product affects the demand for that product, while the cost of producing and delivering the product affects the supply side of the market. As prices and costs change, the market adjusts to find a new equilibrium point where supply and demand are balanced.

The Value Customers Place on a Product and the Prices