Question 15EconomicsJAMB

The price of cars is determined by the

A

interaction of the forces of demand and supply

B

total demand for the commodity

C

total supply of cars

D

total number of people in the market.

Step-by-Step Explanation

Price determination in a market economy is primarily influenced by the interaction of demand and supply forces. When demand for cars increases while supply remains constant, prices tend to rise, and conversely, if supply exceeds demand, prices may fall. This dynamic relationship ensures that the market reaches an equilibrium price where the quantity demanded equals the quantity supplied.

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