The guiding function of prices tends to keep resources flowing toward their most highly valued uses.

Name: The guiding function of prices tends to keep resources flowing toward their most highly valued uses.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Prices in a market economy act as signals to both producers and consumers, guiding resources towards uses that are most valued by society, as higher prices indicate higher demand and potentially higher profits, encouraging the allocation of resources to those areas.

The Guiding Function of Prices Tends to Keep Resources Flowing