Question

Both Smith and Ricardo believed that, in a competitive market, product prices reflect Multiple Choice the combined costs of many different inputs used in producing the products. the policies of government toward trade. the effects of trade rather than the costs of inputs. the cost of labor necessary to produce the products.

Answer 1

Both Smith and Ricardo believed that, in a competitive market, product prices reflect "the cost of labor necessary to produce the products".

Answer: Option D

Explanation:

When there are a lot of manufacturers competing to provide the goods and services required for consumers, this is understood as "a competitive market". No single producer or customer can specify the market within a competitive market. It shares five traits: gain, diminishability, rivalry, exclusion, and rejectability. The wheat market is often drawn as an instance of a competitive market, as there are many manufacturers, and by increasing or decreasing its output, no single producer can impact the market price.