All of the above are correct. Market economies rely on the interaction of supply and demand, which is determined by prices. Prices play a crucial role in guiding economic decisions, allocating scarce resources, and ensuring that quantity supplied and quantity demanded are in balance. Additionally, prices influence how much of a good buyers choose to purchase and how much sellers choose to produce.

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In Market Economies

Question 196

Multiple Choice

In market economies:

A) prices guide economic decisions and thereby allocate scarce resources
B) prices ensure that quantity supplied and quantity demanded are in balance
C) prices influence how much of a good buyers choose to purchase and how much sellers choose to produce
D) all of the above are correct

Correct Answer: