Question

Are prices determined by the market or the firms in a competitive market? Explain your answer.

Answer 1

by the market because they are the ones buying the product, without them, there would be no renvinue for the firms and they would stop production. eg, if the customers want the product to have better quality, the firms would have to respond by getting new products to make the object. this would also increase the price of the object because better quality goods come at a higher price