Prices usually reflect
A)only the value of a good to society.
B)only the cost to society of making a good.
C)both the value of a good to society and the cost to society of making the good.
D)neither the value of a good to society nor the cost to society of making the good.

Question

Quizplus · Accepted Answer

Prices reflect both the value of a good to society (which determines the demand for the good) and the cost to society of producing the good (which determines the supply of the good). In a competitive market, prices will ultimately settle at a point where the demand and supply curves intersect, reflecting both the value and cost of the good.

Prices Usually Reflect