When price mechanism is in operation, the prices of commodities are determined by

Government

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Producer of the commodity

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Demand and supply

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Time period

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Solution

The correct option is C
Demand and supply

When price mechanism is in operation, the prices of commodities are determined by demand and supply in the market.

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Similar questions

Explain why the equilibrium price of a commodity is determined at that level of output at which its demand equals its supply?

Suppose the value of demand and supply curves of a Commodity-X is given by the following two equations simultaneously:

Qd = 200 –10p Qs = 50 + 15p

i) Find the equilibrium price and equilibrium quantity of commodity X.

ii) Suppose that the price of a factor inputs used in producing the commodity has changed, resulting in the new supply curve given by the equation

Qs’ = 100 + 15p

Analyse the new equilibrium price and new equilibrium quantity as against the original equilibrium price and equilibrium quantity.

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