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Explain How Prices Are Determined in a Free-Market Economy

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Explain how prices are determined in a free-market economy.


Definitions:

Respondent Behavior

A behavioral response to stimuli that is conditioned through certain environmental or physiological triggers, as detailed in classical conditioning.

Classically Conditioned

The process by which a neutral stimulus becomes associated with an innately meaningful stimulus and acquires the capacity to evoke a similar response.

Observational Learning

Learning that occurs through observing the behavior of others and the outcomes of those behaviors.

Conditioned Response

A learned response to a previously neutral stimulus that becomes conditioned after being associated with an unconditioned stimulus.

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