The price system is based on (LO2) a) government regulation (i.e., the government sets most prices) b) the individual whim of the businessperson who sets it c) the feelings of the individual buyer d) supply and demand

First, let's understand the meaning behind each option in the context of the price system: a) Government regulation: This means that the government itself determines the prices of products and services in the market. b) Individual whim of the businessperson who sets it: This means that the businessperson, without any specific considerations or fundamental principles, determines the price of the products they are selling. c) Feelings of the individual buyer: This implies that the sentiment or emotions of the buyer profoundly affect and determine the prices of goods and services. d) Supply and demand: This states that the interaction between the quantity and willingness of producers and buyers to trade goods and services determines the prices for those goods and services in the market.

Now that we understand the meaning of each option, we can identify which one is the basis for the price system. In a market economy, the price of a product is determined by the interaction of supply and demand, which causes the price to adjust until an equilibrium is reached. Therefore, the correct answer is: d) supply and demand