Under competition,the price of a resource reveals
A) information about the past,but not future,uses of a resource.
B) the most valuable way to use the resource.
C) how much the resource is worth in the most valuable of its alternative uses.
D) the value of the labor needed to fully exploit the resource.

Question

Quizplus · Accepted Answer

Under competition, the price of a resource reveals how much the resource is worth in the most valuable of its alternative uses. This means that the market determines the most productive and efficient use of the resource through the price mechanism. The price reflects the supply and demand for the resource and the willingness of consumers to pay for it. This information is valuable for producers who need to allocate their resources efficiently to maximize profits. Therefore, option C is the correct choice. Options A, B, and D are incorrect because they do not fully capture the role of prices in resource allocation under competition.

Under Competition,the Price of a Resource Reveals