A seller at a farmer's market wants $10 for a bag of 10 apples. You think...

A seller at a farmer's market wants $10 for a bag of 10 apples. You think his price is too high, so you counter with an offer of $6 for the bag. The seller then offers you a much smaller bag of five apples for $6. You bargain again, and the seller lets you buy the 10 apples for $8. This scenario is an example of:

a centrally planned market.
	a shortage.
	a market in action.
	perfect competition.

Solutions

Expert Solution

The scenarios discussed is an example of a market in action as te buyers and sellers interact in a marketplace to create conditions which are suitable for both to carry out the transactions. At the price of $8, both the seller and the buyer is better off than not doing the transaction at all.

It is not an example of shortage as if that was the case he seller will have a lot more bargaining power and he will not reduce the price as it is not in his best interest to do do

It is not an example of perfect competition as if that was the case, charging a slightly high price will drive the demand to 0 and the seller will not do that.

Rahul Sunny answered 1 year ago

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