If a competitive market operates perfectly, it relies on
A. The number of people buying goods
B. The laws of supply and demand
C. How many products can be produced for sale
d. how much people are willing to pay for the products.
The answer is B?
yes
Yes, the correct answer is B. The laws of supply and demand. In a perfectly competitive market, the prices of goods and services are determined by the interaction of supply and demand. The supply is determined by the producers, who consider the cost of production and the market price, while the demand is determined by consumers, who consider the utility or satisfaction they derive from the goods or services. The market reaches equilibrium when the quantity demanded equals the quantity supplied, at a price that clears the market.
Yes, the answer is B. In a perfectly competitive market, the laws of supply and demand play a critical role in determining prices and quantities. This means that the interaction between the supply of a product (the quantity that producers are willing to supply at various prices) and the demand for that product (the quantity that consumers are willing to buy at various prices) determines the equilibrium price and quantity in the market.
To arrive at this answer, you can eliminate options A, C, and D. Option A refers to the number of people buying goods, which is not the determining factor in a perfectly competitive market. Option C refers to the production of goods, which is not enough to ensure a perfectly competitive market. Option D refers to how much people are willing to pay for products, which is related to demand but not sufficient to fully capture the dynamics of a perfectly competitive market.
By process of elimination, you can identify that option B, the laws of supply and demand, is the most accurate answer.