Which of the following is true of price determination in economic theory?
A)It suggests a way of determining prices that assumes a sales-maximization objective.
B)It attempts to derive correct equilibrium prices in the marketplace by comparing supply and demand.
C)It attempts to maximize the market share of an organization.
D)It suggests a way of determining prices that assumes a market-share expansion objective.

Question

Quizplus · Accepted Answer

Price determination in economic theory attempts to derive correct equilibrium prices in the marketplace by comparing supply and demand. This process considers various factors such as competition, consumer preferences, and production costs to arrive at a price that balances supply and demand. It is not focused on maximizing sales or market share expansion, as those objectives are typically considered in marketing strategy rather than economic theory.

Which of the Following Is True of Price Determination in Economic