The price at which goods and services are bought and sold between willing sellers and buyers in an arm's-length transaction is called a _____.
A) fair market value
B) disposal value
C) replacement value
D) book value

Question

Quizplus · Accepted Answer

Fair market value is the most appropriate term to describe the price at which goods and services are bought and sold between willing sellers and buyers in an arm's-length transaction. It takes into account various factors, such as the supply and demand of the goods and services, their quality and quantity, market trends, and economic conditions, to arrive at a reasonable and objective price that reflects the true value of the transaction. Disposal value, replacement value, and book value are not necessarily synonymous with fair market value and may have different meanings and implications depending on the context.

The Price at Which Goods and Services Are Bought and Sold