The market price of apples is currently rising. In a free-market economy, the most likely explanation of this price change is that:

a. the equilibrium price is lower than the market price.

b. the government has decided to set a higher price so that firms competing in the market make an adequate profit.

c. the supply of money has decreased. there is a shortage in the market for apples.

Question

Aimee Benjamin

Business

7 December, 19:24

The market price of apples is currently rising. In a free-market economy, the most likely explanation of this price change is that:

a. the equilibrium price is lower than the market price.

b. the government has decided to set a higher price so that firms competing in the market make an adequate profit.

c. the supply of money has decreased. there is a shortage in the market for apples.

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Answers (1)

Know the Answer?

Alexia Dalton · Answer 1

Answer: the supply of money has decreased. there is a shortage in the market for apples (C)

Explanation:

In a free market economy, the prices of goods and services are determined by the forces of sand and supply.

When there is an increase in the price of apples in the market, it could be as a result of increase in demand and less supply. When there is more demand than supply, it will lead to shortages of apples and the few ones in the market will be sold at higher prices.