The essential feature of the market mechanism is the price signal.

Question

Quizplus · Accepted Answer

The market mechanism relies on the price signal to allocate resources and coordinate economic activity. Prices serve as an indication of the relative scarcity or abundance of a good, and guide individuals and firms in making decisions about production, consumption, and investment. As such, the price signal is a key mechanism through which the market economy achieves efficiency and responsiveness to changing conditions.

The Essential Feature of the Market Mechanism Is the Price