ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Prices favor neither the producer nor the consumer.
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Prices remain surprisingly stable despite unexpected events.
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Competitive markets find their own prices without interference.
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Prices are easily understood.
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Detailed explanation-1: -Which of the following is a reason why prices effectively perform the allocation function. Competitive markets find their own prices without interference.
Detailed explanation-2: -The price system is an efficient way to allocate resources because producers, motivated by profit, choose to use their resources to produce certain goods and services, and prices adjust until the maximum number of goods and services are sold.
Detailed explanation-3: -Although the price system is not perfect, most economists believe it is the most efficient way to allocate resources. This is because prices do more than help individuals make decisions; they also help allocate resources both within and between markets.
Detailed explanation-4: -3 reasons why prices effectively perform the allocation function. The federal minimum wage law demonstrates. In a market economy, a high price is a signal for. Deficiency payments are part of a federal program to assist. The theory of competitive pricing. All the characteristics of allocation by rationing. More items