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The Allocative Function of Price Is To

Question 22

Multiple Choice

The allocative function of price is to:


A) distribute scarce goods and services to those consumers who value them the most highly.
B) ensure that firms in perfectly competitive markets earn an economic profit.
C) direct resources away from markets that are overcrowded and toward markets that are underserved.
D) provide subsidies to low-income families so they can purchase essential goods and services.

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