The price system_______________?
Correct answer: D. only B and C
- A. is equitable
- B. rations products among consumers
- C. allows wealthy consumers to obtain more products
- D. only B and C
Explanation
The price system allocates scarce goods through prices: those able and willing to pay more can obtain more, while prices ration limited supplies among consumers. Thus both statements B and C describe its operation, although this process is not necessarily equitable.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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