CA Foundation · Business Economics · Price Determination in Different Markets
Which of the following best describes a market in the economic sense?
In economics, a market is any arrangement through which buyers and sellers of a commodity come into contact and carry out transactions. It does not require a fixed physical location, since dealings can happen by phone, post or online, so the physical-place definition is too narrow.
- AA physical place where buyers and sellers must meet in person
- BAny arrangement through which buyers and sellers of a commodity are in contact to carry out transactionsCorrect
- CA place where only wholesale goods are traded
- DA government-regulated place for trading in securities
Explanation
In economics a market is not tied to a particular place. It refers to the whole arrangement through which buyers and sellers communicate and deal, whether in person, by phone or online. Option A is wrong because physical presence is not required.
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