What is a buyer's market?

A buyer's market is characterized by more supply than demand, which places buyers in a favorable position during negotiations. In such a market, sellers often have excess inventory that they need to sell, leading to more options for buyers. Consequently, this dynamic typically results in lower prices and more favorable terms for buyers, as sellers may be willing to negotiate to close a deal. Buyers can take their time making decisions because they have the advantage of choice and leverage, often resulting in opportunities for lower purchase prices and beneficial contract terms.

The context behind the other options helps to clarify why they do not describe a buyer's market. Rapidly rising prices driven by high demand, as stated in one of the choices, indicates a seller's market where competitive bidding causes prices to go up rather than down. Another choice describing competition among buyers that drives prices down conflicts with the definition of a buyer's market, where the advantage lies with the buyer due to an excess supply, not competition among buyers. Lastly, a descriptor of a market phase where sellers hold the upper hand due to limited inventory directly contradicts the conditions of a buyer's market, which is defined by higher supply than demand. This reinforces that option A accurately captures the essence of a buyer's market.