An increase in the price of beef provides
A)no information because prices in a market system are managed by planning boards.
B)information which tells consumers to buy less pork.
C)information which tells producers to produce more beef.
D)information which tells consumers to buy more beef.

Question

Quizplus · Accepted Answer

An increase in the price of beef indicates that the demand for beef is higher than the supply, and producers will respond by increasing production to reap higher profits. This is the market mechanism and not managed by planning boards. Therefore, the correct answer is C. Option A is incorrect because prices in a market system are not managed by planning boards. Option B is incorrect since an increase in beef prices does not indicate that consumers should buy less pork. Option D is incorrect because consumers may respond to the price increase by buying less beef, not more.

An Increase in the Price of Beef Provides