Increasing prices act as a signal to:
A) politicians that price gouging is occurring.
B) suppliers to increase the quantity supplied in those markets.
C) consumers that the good is overvalued.
D) speculators that the opportunity cost of the good is falling.

Question

Quizplus · Accepted Answer

Increasing prices act as a signal for suppliers to increase the quantity supplied in those markets. As the price increases, suppliers are incentivized to increase production and supply more of the good to meet the rising demand. This can result in a decrease in prices as supply increases and demand stabilizes. The other options are not accurate representations of how prices function in markets.

Increasing Prices Act as a Signal To