True or false? A fair market price is what any market participant is willing to trade with any other market participant at a given point in time.

Answer 1

Hello,

True.

Here is why. Fair market price or commonly known as fair market value is what a buyer, seller, or entity are willing to trade usually for money or something of value. Yes the system where the trade or sale takes place is called the free market.

The market is self regulating when consumers are left to freely choose what they want to buy, and businesses are left to freely decide what they want to sell. According to Adam Smith, the godfather of free market enterprise, the "...self-interest of both will lead to decisions that result in good prices and the right products in the economy and marketplace". Both participants must have knowledge of the what is being traded.

My definition of fair market price is what a customer has paid or will pay for a commodity. However, in a buying and selling transaction both participants are motivated to get the best price. There is a term "buyer beware" it involves a salesman who may try to tell you or sell you different!

Patrick M. MBA