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Question
Layla attends the farmers market in her hometown of Bakersfield every Sunday. She notices that all of the oranges sold by the many different farmers at the market have roughly the same price, as do most other products that are alike. Which statement best explains why the prices are so similar?
a. The farmers market in Bakersfield is an imperfect market, so prices are set by the producers.
b. The farmers market in Bakersfield is a monopoly because it is the only place to buy fresh fruit on Sundays.
c. The farmers market in Bakersfield is a competitive market, so prices are set by the consumer.
d. The farmers market in Bakersfield is a competitive market, so neither the consumer nor the producer has a large influence on the price, allowing for the market to set the price.
e. The farmers market in Bakersfield is an imperfect market where Laylas decision whether to purchase an orange will not change the price of an orange.
Answer
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