A market consists of potential buyers of a good or service. However, for a market to exist, which of the following must also be present?

• A. There must be both buyers and sellers willing to exchange the good or service.
• B. There must be government regulation of the good or service.
• C. There must be only one seller with monopoly power.
• D. There must be perfect information among buyers only.

Answer: (A)

Verified step by step guidance

1. Understand the definition of a market in microeconomics: a market is a place or system where buyers and sellers interact to exchange goods or services.
2. Identify the essential components for a market to exist: there must be at least one buyer willing to purchase and at least one seller willing to sell the good or service.
3. Recognize that government regulation, monopoly power, or perfect information are not necessary conditions for a market to exist, although they may affect how the market functions.
4. Conclude that the fundamental requirement for a market is the presence of both buyers and sellers willing to engage in exchange.
5. Therefore, the correct condition for a market to exist is that there must be both buyers and sellers willing to exchange the good or service.