The interaction between buyers and sellers in a market system determines which of the following?

• A. The equilibrium price and quantity of a good or service
• B. The marginal cost of production for all firms
• C. The total utility derived from consumption
• D. The production possibilities frontier

Answer: (A)

Verified step by step guidance

1. Understand that the problem is asking about the outcome of the interaction between buyers and sellers in a market system.
2. Recall that in microeconomics, the interaction of supply (sellers) and demand (buyers) determines the market equilibrium.
3. Define market equilibrium as the point where the quantity demanded by buyers equals the quantity supplied by sellers.
4. Recognize that this equilibrium point determines both the equilibrium price and the equilibrium quantity of the good or service.
5. Note that other options like marginal cost, total utility, and production possibilities frontier are related concepts but are not directly determined by buyer-seller interactions in the market.