Question : Which factor affecting price determination is highlighted in the given statement?
Statement: Consumer usually purchase more units at a lower price than at a higher price.
Option 1: Product cost
Option 2: Utility and demand of the product
Option 3: Extent of competition in the market
Option 4: Government and legal regulations
Correct Answer: Utility and demand of the product
Solution : According to the law of demand consumer usually purchase more units at low price then at a higher price.The product price must reflect the interest of both buyer and seller. The buyer maybe ready to pay up to the point where the utility from the product is at least equal to the sacrifice made in terms of price paid.
Hence, option B is correct.
