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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