Which of the following is a problem with the price system that can lead to fluctuations in output?
A) The price system works silently in the background.
B) Prices can be slow to adjust.
C) Prices may be flexible.
D) all of the above

Question

Quizplus · Accepted Answer

Prices can be slow to adjust, which means that changes in demand or supply may not be immediately reflected in prices. This can lead to fluctuations in output as producers may continue to produce at a certain level despite changes in demand, causing either a surplus or a shortage in the market. The other options given do not necessarily represent problems with the price system that can lead to fluctuations in output.

Which of the Following Is a Problem with the Price