Final answer:
Businesses and producers select the prices of goods and services based on various economic factors including production costs and market demand, with consumers also influencing prices through their purchasing decisions.
Step-by-step explanation:
Businesses and producers are the ones that choose a price at which to sell goods and services.
In a market economy, businesses make decisions on the pricing of goods and services they offer based on the cost of production and the competition in the market. Producers, who can also be considered businesses in this context, take into account production costs, the expected profit margin, and what the market can sustain when setting their prices. Consumers, on the other hand, determine how much they are willing to pay and which products they will buy, contributing indirectly to the eventual market price through supply and demand dynamics.
Prices are not arbitrarily chosen but result from balancing production costs with what consumers are prepared to pay. Through the interaction between consumer demand and producer supply, a market price is established. Therefore, while consumers have a significant role, it is the businesses and producers who initially set the prices.