The supply and demand model is not appropriate when analyzing markets where
A) there are many buyers.
B) there are many sellers.
C) suppliers provide identical products.
D) transactions are costly.
E) both buyers and sellers know all the information about the product.

Question

Quizplus · Accepted Answer

The supply and demand model assumes that transactions are costless and therefore cannot account for markets with transaction costs, such as brokers' fees, transportation costs, and taxes.

The Supply and Demand Model Is Not Appropriate When Analyzing