The market price of apples is currently rising. In a free-market economy, the most likely explanation of this price change is that:
A) the government has decided to set a higher price so that firms competing in the market make an adequate profit.
B) there is a shortage in the market for apples.
C) the supply of money has decreased.
D) the equilibrium price is lower than the market price.

Question

Quizplus · Accepted Answer

The most likely explanation of the rising price of apples in a free-market economy is that there is a shortage in the market for apples. When demand for apples is greater than the available supply, prices tend to increase. This can be due to factors such as weather conditions, changes in consumer preferences or a decrease in the number of apple growers.

The Market Price of Apples Is Currently Rising