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How is the equilibrium price determined in a competitive market?

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Question

How is the equilibrium price determined in a competitive market?

Options

  • Set by sellers only

  • Set by buyers only

  • Set by government

  • Set by interaction of demand and supply

MCQ
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Solution

Set by interaction of demand and supply

Explanation:

Competitive markets determine prices through demand and supply interaction,not by any single participant.

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