Question

How are prices determined in a pure market economy?

Answer 1

In a free market economy the price is determined by supply and demand within the market. Demand being the quantity of something that buyers will be willing to purchase at a set price. And supply is the amount of the product that the sellers can offer at the set price.

Answer 2

Prices are determined in a free market economy through the interactions of supply and demand in the Marketplace where demand is the quantity of a product that buyers are willing to purchase according to a given price and supply is the amount of a product that sellers can vendor to customers at a given price.