Which of the following best defines market forces?

Market forces refer to the natural economic factors that influence the supply and demand for goods and services in a market, leading to price determination without requiring external intervention. The interaction between consumers who demand products and producers who supply them creates a dynamic where prices can fluctuate based on scarcity, popularity, and consumer preferences.

When prices are determined solely by market forces, it indicates that they respond to changes in supply (availability of goods or services) and demand (consumer willingness and ability to purchase). For instance, if a particular good becomes scarce, demand may outpace supply, leading to an increase in its price, whereas an abundance of a product might cause prices to drop.

In contrast, interventions by the government or fixed pricing do not allow for the natural adjustment of prices based on market conditions. Understanding these concepts is crucial in grasping how economies operate and in recognizing the role that supply and demand play in price formation.