The free-market system coordinates output decisions by pushing
A)up price when there is a shortage.
B)down price when quantity demanded exceeds quantity supplied.
C)up price when there is a surplus.
D)up price when quantity supplied exceeds quantity demanded.

Question

Quizplus · Accepted Answer

In a free-market system, when there is a shortage (meaning the quantity demanded exceeds the quantity supplied), prices tend to go up. This is because sellers can charge more due to the high demand and limited supply, encouraging an increase in production and a return to equilibrium.

The Free-Market System Coordinates Output Decisions by Pushing