**In the long run, price is primarily governed by demand and supply forces.**

**Demand and Supply Forces:**
Demand and supply forces play a crucial role in determining the price of a product or service in the long run. The interaction between these two forces sets the equilibrium price at which the quantity demanded equals the quantity supplied.

- *Demand:* Demand refers to the desire, willingness, and ability of consumers to purchase a particular product or service at a given price. Several factors influence demand, including consumer preferences, income levels, population size, and expectations. As demand increases, indicating a higher level of consumer interest, the price tends to rise. Conversely, when demand decreases, prices tend to fall due to reduced consumer interest.

- *Supply:* Supply refers to the quantity of a product or service that producers are willing and able to offer for sale at different prices. Factors such as production costs, technology, input prices, and government regulations affect the supply of a product. When the supply exceeds demand, prices tend to decrease as producers seek to sell their excess inventory. Conversely, when demand exceeds supply, prices tend to increase as producers can command higher prices due to limited availability.

**Marginal Utility:**
While marginal utility is an important concept in economics, it has a limited impact on long-run price determination. Marginal utility refers to the additional satisfaction or benefit derived from consuming an additional unit of a good or service. It follows the law of diminishing marginal utility, which states that as a consumer consumes more units of a good, the additional satisfaction derived from each successive unit decreases.

While marginal utility influences consumer behavior and individual purchasing decisions, it does not directly determine the price of a product in the long run. Instead, it influences the demand for a product and the quantity consumers are willing to purchase at different price levels. However, when considering the overall market equilibrium and price determination, the interplay between demand and supply forces takes precedence.

**Cost of Production:**
The cost of production is another factor that influences price but has a more direct impact on the supply side rather than the long-run price determination. The cost of production includes expenses such as raw materials, labor, overhead costs, and other inputs required to produce a product. These costs affect the supply curve by influencing the quantity of output producers are willing to supply at different price levels.

While higher production costs can lead to increased prices, it is important to note that they are not the sole determinant of long-run price. Producers must also consider market demand and competition when setting prices. If the prices exceed what consumers are willing to pay, producers may need to adjust their production costs or find ways to improve efficiency to maintain profitability.

**Conclusion:**
In conclusion, while marginal utility and the cost of production do have an influence on price determination, the primary factor governing price in the long run is the interplay between demand and supply forces. Market equilibrium is achieved when quantity demanded equals quantity supplied, and prices adjust accordingly to balance the market. Therefore, the long-run price is predominantly determined by the forces of demand and supply.

In the long run price is governed by Cost of Production.