The use of a price system eliminates:
A) scarcity.
B) equilibrium.
C) shortages and surpluses.
D) changes in supply and demand.

Question

Quizplus · Accepted Answer

The use of a price system helps to allocate resources efficiently by signaling shortages or surpluses in the market. As prices rise, it indicates a shortage, and as prices fall, it indicates a surplus. This allows for adjustments in the supply and demand of goods, ultimately leading to a balance between the two. However, the price system cannot eliminate scarcity as it is a fundamental economic problem resulting from limited resources and unlimited wants. Additionally, the price system does not eliminate equilibrium or changes in supply and demand as it is designed to respond to these changes.

The Use of a Price System Eliminates