Question

Which of the following represents one of the four basic assumptions of the supply and demand model?

A. Consumers aim to maximize utility.
B. Producers seek to minimize costs.
C. Government interventions are necessary for market equilibrium.
D. Market participants have perfect information.

Answer 1

One of the basic assumptions of the supply and demand model is that market participants have perfect information.

Step-by-step explanation:

One of the basic assumptions of the supply and demand model is that market participants have perfect information. This means that buyers and sellers have complete knowledge about prices, quantities, and other relevant factors in the market. With perfect information, participants can make rational decisions and the market can function efficiently.