Participants in the market system________________?
Correct answer: B. are affected by prices and incomes
- A. are totally free to pursue their goals
- B. are affected by prices and incomes
- C. try to maximize their worth
- D. try to maximize their labor
Explanation
Market participants respond to incentives, especially changes in prices and incomes, when deciding what to buy, sell, or produce. The other choices do not describe the general constraint governing all participants.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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