Higher prices may serve the public interest when
A)there is a shortage of goods or services available.
B)there is an equal distribution of traffic on alternate routes.
C)higher prices never serve the public interest.
D)lower prices signal scarcity.

Question

Quizplus · Accepted Answer

When there is a shortage of goods or services available, higher prices can help to allocate the limited supply to those who value it the most. This can prevent hoarding or stockpiling, ensure a more equitable distribution of resources, and incentivize producers to increase supply.

Higher Prices May Serve the Public Interest When