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Prices

A. are set by buyers.
B. come from the interaction of demand and supply, in markets with appropriate property rights.
C. are regulated by government agencies.
D. are none of the above.

1 Answer

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Final answer:

Prices in a market-oriented economy are determined by the interaction of demand and supply, with consumers and producers responding based on preferences, budgets, and profit expectations, respectively.

Step-by-step explanation:

The question at hand is asking where prices come from, specifically, whether prices are set by buyers, result from the interaction of demand and supply, are regulated by government agencies, or none of the above. Based on the information provided about how prices work in a market-oriented economy, it is clear that prices come from the interaction of demand and supply, in markets with appropriate property rights. This is because in such an economy, prices are not directly set by buyers, nor are they typically regulated by government agencies. Rather, prices serve as a vital social mechanism to collect, combine, and transmit information about demand and supply. Consumers react to prices according to their preferences and budget, while producers respond in consideration of their expected profits. Thus, the correct answer is B. come from the interaction of demand and supply, in markets with appropriate property rights.

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