Question 3
Price DeterminationThe price of a commodity is determined by the
- A.supplier
- B.consumer
- C.quantity of goods demanded
- D.quantity of goods supplied
- E.interaction of demand and supply.
Show the answer and explanation
Answer: E (interaction of demand and supply.)
Explanation
In a free market, price is set where the forces of demand and supply meet (equilibrium), not by one side alone.