In any given market, prices are determined by
A) specialization of labor.
B) transactions costs.
C) supply and demand.
D) comparative advantage.

Question

Quizplus · Accepted Answer

Prices in a market are determined by the interaction between supply and demand. When the demand for a good or service is high and the supply is low, the price of that good or service increases. On the other hand, when the demand is low and the supply is high, the price decreases. This is the basic principle of supply and demand that determines prices in any given market. Specialization of labor, comparative advantage and transactions costs may affect the efficiency of a market, but they do not directly determine prices.

In Any Given Market, Prices Are Determined by