All markets ultimately are composed of:

• A. banks setting interest rates
• B. government agencies regulating prices
• C. buyers and sellers interacting to exchange goods and services
• D. firms competing for monopoly power

Answer: (C)

Verified step by step guidance

1. Understand the fundamental concept of a market in microeconomics: a market is a system or an environment where buyers and sellers interact to exchange goods and services.
2. Recognize that while banks setting interest rates and government agencies regulating prices influence markets, they are not the core components of what constitutes a market itself.
3. Identify that firms competing for monopoly power describes a specific market structure scenario, not the general composition of all markets.
4. Focus on the essential elements of any market: buyers (demand side) and sellers (supply side) who come together to trade goods and services.
5. Conclude that the correct description of all markets is 'buyers and sellers interacting to exchange goods and services,' as this captures the basic and universal nature of markets in microeconomics.