Question : Which factor affecting price determination is highlighted in the given statement?
Statement: It must reflect the interest of both buyers and sellers.
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
Answer (1)
12th Jan, 2024
Correct Answer: Utility and demand of the product
Solution : 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. However the seller would try to at least cover the costs.
Hence, option B is correct.
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