Scenario: Learning the American Way
Sergei Chernovl is a Russian exchange student.To learn more about how a market economy functions,Sergei is conducting research comparing businesses in Russia with businesses in the United States.
-Sergei finds out that prices in a market economy are determined by the interplay of ________.

Question

Quizplus · Accepted Answer

In a market economy, prices are determined by supply and demand. The interaction between the amount of goods or services available (supply) and the level of consumer demand for those goods or services helps to set the market price. Therefore, choice D, which represents supply and demand, is the correct answer.Choices A, B, and C are not accurate because they do not correctly identify the key components of a market economy.