Question

Adam Smith believed that fair prices for goods are determined in a capitalist system:______ a) through competition between businesses. b) by government regulation of businesses. c) by setting limits on imports and exports. d) through competition between consumers.

Answer 1

Answer:

The correct answer is A

Explanation:

Adam Smith is one of the first theorist who refer to the system of capitalism. Under this system, he asserts that when the person or an individual conduct or make a trade, they value what they bought more than they value what are exchanging for the commodity.

So, under this system, he believed that the fair as well as correct prices of the commodity or the goods will be determined through the competition among the businesses.