When price changes act as a line of communication between buyers and sellers, price is functioning as

Question

Quizplus · Accepted Answer

Price acts as a signal to indicate the relative scarcity of a good or service in the market. Buyers and sellers can use the price as a signal to adjust their behavior accordingly, either by changing their demand or supply. Therefore, D is the correct choice as the signal is the most appropriate function of the price in this scenario.

When Price Changes Act as a Line of Communication Between