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micro-economic

This topic has 1 reply, 2 voices, and was last updated 1 year ago by Ken Garrett.

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May 28, 2023 at 7:51 am #685216
jermy01
Participant
- Topics: 51
- Replies: 31
In a free market economy, the price mechanism:
a. Aids government control
b. Allocates resources
c. Measures national wealth
the answer is, B. But I don’t understand, will you please explain why?
May 28, 2023 at 8:07 pm #685263
Ken Garrett
Keymaster
- Topics: 10
- Replies: 10544
If a product is in high demand, prices will rise as buyers compete for units of the product. Higher prices will cause producers to make more units thereby allocating more resources to making what consumers want.
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