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Explain that market-determined prices

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Your cousin asks you why prices determined by the market are better than prices determined by the government. Because you have taken this "Principles of Economics" class, you explain that market-determined prices are better because they generally reflect

1-the value of a good to society, but not the cost of making it.

2-the cost of making a good to society, but not its value.

3-both the value of a good to society and the cost of making it.

4-neither the value of a good to society nor the cost of making it

Reference no: EM132264119

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