In a Market System, How Are the Price Signals Established

question 258

Multiple Choice

In a market system, how are the price signals established?

• A) Consumer advocacy groups establish fair prices for items, and most firms follow these pricing guidelines because they don't want to anger their consumers.
• B) Industry associations establish an acceptable price range for each commodity sold within the industry, and member firms are obligated to abide by association guidelines.
• C) The forces underlying supply and demand interact to determine a market clearing price.
• D) Federal legislation establishes maximum prices for most goods, and state governments regulate the prices of any remaining items.

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Definitions:

Jigsaw Classroom

An educational approach designed to minimize competition and foster cooperative learning among students by dividing assignments into segments, making each student responsible for sharing a piece of the task.

Compete

The act of participating in an event or activity with the aim of winning or achieving superiority over others.

Top Award

A top award is the highest honor or recognition given in a competition, field, or industry.

Self-Fulfilling Prophecy

A prediction that directly or indirectly causes itself to become true, due to the positive feedback between belief and behavior.