Final answer:
A market requires consumers to have a need or desire for a product, the ability to purchase it, and the willingness to use their buying power. Discretionary income and authority to buy are not essential for a market to exist, but do influence the extent and nature of participation in the market. Therefore, the correct option is B.
Step-by-step explanation:
To determine the necessary conditions for a market to exist, we consider several factors that influence demand for goods and services. A market is a place where buyers and sellers meet to exchange goods and services. There are specific conditions necessary for a market to function properly:
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- A need or desire for a particular product is essential; if there's no want or need, there is no incentive to purchase.
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- The ability to purchase the product is crucial. Without the financial resources or purchasing power, a prospective buyer does not contribute to effective demand.
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- Discretionary income may influence the range and quantity of products a consumer can buy but is not a requirement for a market to exist; essential needs can drive demand even in its absence.
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- A willingness to use their buying power indicates an intention to actively participate in the market.
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- Lastly, having the authority to buy specific products is implied in any market transaction, as individuals typically have the right to use their resources as they see fit.
In summary, a consumer's need or desire, ability to purchase, and willingness to use their buying power are fundamental to generating demand, which is the cornerstone of any market.