A Situation in Which Purchases Do Not Occur Because the Value

question 150

Essay

A situation in which purchases do not occur because the value the potential seller places on the good exceeds the value a potential consumer places on the good will occur in:
A.a market dominated by government regulation.
B.well-functioning markets.
C.a market made up of many buyers and sellers.
D.a centralized market system.

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Definitions:

Revealed Preference

A theory that assumes individuals' preferences can be determined by their purchasing habits.

Weak Axiom

A principle in consumer choice theory stating that if a consumer prefers bundle A over bundle B when both are available at the same prices, then the consumer will not purchase more of bundle B if its price rises.

Revealed Preference

An economic theory stating that the preferences of consumers can be understood by their purchasing habits.

Prices

The monetary value assigned to goods and services in a market, dictating the exchange rate at which these can be traded.