Chantelle grows tomatoes and sells them at the farmer's market. Because the price of tomatoes rises, she is encouraged to grow and sell more. This is an example of price functioning as

Question

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Price is serving as an incentive in this scenario as the increase in price encourages Chantelle to produce and sell more tomatoes. The higher price signals to her that there is greater demand for tomatoes and thus, creating more supply can lead to higher profits.

Chantelle Grows Tomatoes and Sells Them at the Farmer's Market