In a market system, prices:
A) are unfair.
B) are too high.
C) signal the relative scarcity of a product.
D) all of the above.

Question

Quizplus · Accepted Answer

Prices in a market system serve as signals indicating the relative scarcity of a product. They reflect the interaction of supply and demand, with higher prices indicating that a product is more scarce and in higher demand, while lower prices indicate the opposite. While some may argue that prices are unfair or too high, these subjective opinions do not change the basic economic function of prices in a market system.

In a Market System, Prices