m3 study questions.docx - Study Questions M3 Chapter 7 1 a...

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Study Questions- M3 Chapter 7 1. a) Define and describe a price discovery system in general. A price discovery system is when buyers and sellers arrive at prices for a commodity. This happens when the market conditions do not allow either of these groups to set prices and when all participants are individually price takers or price negotiators. The price can be determined by market supply and demands as well as interactions between buyers and sellers. b) Explain the two major types of price discovery systems . Provide at least 2 benefits and 2 disadvantages for each.

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