The competitive market price of a good is equal to
A) The value consumers place on the last unit they purchased
B) The value consumers place on what they have to give up to get the good
C) The value consumers place on an additional unit of the good
D) The value consumers place on a substitute good

Question

Quizplus · Accepted Answer

The competitive market price of a good is determined by the intersection of the supply and demand curves, and it represents the value that consumers place on an additional unit of the good. This is because at the market price, consumers are willing to pay that amount for an additional unit, and producers are willing to supply that unit at that cost. Therefore, the market price reflects the value that consumers place on the good at the margin.

The Competitive Market Price of a Good Is Equal to