ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Prices convey information by signaling opportunity cost to consumers and helping producers make production decisions. Prices give markets flexibility to respond to changing conditions. Prices guide scarce resources to their most efficient uses.

Detailed explanation-2: -Characteristics of a Mixed Economy While most prices are set by supply and demand, the government may intervene in the economy by enforcing price floors or ceilings for certain goods, or by directing public funds to certain industries at the expense of others.

Detailed explanation-3: -The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of their effective demand, the producers would lack a key motivation to produce, which is to sell to consumers.

Detailed explanation-4: -A market economy is a type of economic system where supply and demand regulate the economy, rather than government intervention. A true free market economy is an economy in which all resources are owned by individuals.