In the passage about free market economics, who are considered by the economists to be the right group of people to set the price of a commodity?

Difficulty: Medium

Correct Answer: the aggregate of consumers

Explanation:


Introduction / Context:
This comprehension question is about the free market view of price determination. The passage contrasts price-fixing by sellers with the ideal of prices being established in a free market, and it clearly identifies whose preferences are supposed to determine prices in that model.


Given Data / Assumptions:
• The passage states that a price determined by the seller, or anyone other than the aggregate of consumers, seems pernicious to free market economists.
• The term aggregate of consumers refers to all consumers taken together.
• The author explains that, in free market thinking, the role of demand is central.
• The question asks for the group considered right to set prices, according to these economists.


Concept / Approach:
In pure free market theory, prices are set by the forces of demand and supply. On the demand side, consumers collectively reveal their preferences through purchases, and this demand is considered the legitimate force influencing prices.


Step-by-Step Solution:
Step 1: Locate the sentence that mentions who should not determine price: the seller or anyone other than the aggregate of consumers. Step 2: Understand that the phrase other than excludes all but the group named. Step 3: Note that aggregate of consumers identifies consumers collectively as the correct group. Step 4: Compare this with the options given. Step 5: Choose the option that exactly matches this phrase.


Verification / Alternative check:
If we substituted sellers or economists into the sentence instead of aggregate of consumers, it would contradict the free market view described. Only the aggregate of consumers matches both the text and standard economic theory on free markets.


Why Other Options Are Wrong:
The buyers: This is close in meaning but less precise than aggregate of consumers and does not quote the passage accurately.
The sellers: The passage states that prices determined by sellers are seen as pernicious by these economists.
The economists: They describe and analyse market forces; they do not, in the ideal free market, directly set prices.


Common Pitfalls:
Students sometimes choose buyers, thinking of the common phrase buyers and sellers. However, the exam expects the exact expression aggregate of consumers because it captures all consumers together and mirrors the language of the passage.


Final Answer:
The correct answer is the aggregate of consumers, since free market economists believe that prices should be determined only by the collective preferences and actions of consumers, not by sellers or other authorities.

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