Which of the following best describes what a market includes in economics?

• A. Government agencies that regulate prices
• B. Only the physical location where goods are sold
• C. Buyers and sellers who interact to exchange goods and services
• D. Producers who set prices without any consumer input

Answer: (C)

Verified step by step guidance

1. Understand the concept of a market in economics: A market is not limited to a physical place but refers to any arrangement where buyers and sellers interact to exchange goods and services.
2. Recognize that government agencies, while they may influence markets through regulation, are not themselves part of the market; they act as external regulators.
3. Note that producers setting prices without consumer input describes a monopoly or non-competitive market behavior, but this does not define what a market is.
4. Eliminate the option that restricts the market to only a physical location, since markets can be virtual or decentralized without a specific place.
5. Conclude that the best description of a market is the interaction between buyers and sellers who exchange goods and services.