Individual economic decisions are coordinated by

Question

Quizplus · Accepted Answer

Markets coordinate individual economic decisions through adjustments in prices. Prices play a crucial role in providing signals to buyers and sellers about the scarcity of goods and services. As the demand for a product increases, the price goes up, which signals producers to increase production to meet the demand. Similarly, if the supply of a product decreases, the price goes up, which signals producers to increase production to earn the higher profits. In this way, the market system coordinates the actions of buyers and sellers without any central authority.

Individual Economic Decisions Are Coordinated by