Which Statement About Markets, Consumer and Producer Behavior in Markets

question 4

Multiple Choice

Which statement about markets, consumer and producer behavior in markets, and market theory is false?

• A) Market consumers attempt to maximize utility based on preference and price.
• B) Market theory states that the market achieves competitive equilibrium based on allocative efficiency.
• C) Market competition is the mechanism for setting supply and demand.
• D) Market producers attempt to maximize profits based on their mix of input and output.

---

Definitions:

Price-Inelastic

Describes a situation where the demand for a product or service is relatively unaffected by changes in its price.

Water

A transparent, tasteless, odorless, and nearly colorless chemical substance that is the main constituent of Earth's hydrosphere and the fluids of most living organisms.

Price Elasticity

An indicator of the sensitivity of demand for a product to variations in its price, represented as a percentual change.

Small Percentage

A quantitatively minor proportion or fraction of a total amount, often implying a negligible or minor impact.