micro-economic

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May 28, 2023 at 7:51 am #685216
jermy01
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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
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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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