Question

What determines the level of prices in a market?

Short answer

Demand and supply determine the level of prices in a market.

Step-by-step solution

Step 1. Define price.

The price of a product is the amount of money that must be spent to obtain it.

Step 2. What factors influence a market's pricing level?

The junction between demand and supply in a market determines market prices. The ability and willingness of a person to purchase products and services at a certain price is referred to as demand. The ability and willingness of a producer to supply items at a certain price is referred to as supply. Demand and supply work together to establish the price at which goods are bought and sold in a market.