Jane sells bowls of noodles for $6 at her noodle shop. The average price of a bowl of noodles in the city starts rising. In response to this, Jane starts to produce more bowls of noodles and raises her price to $6.50. This is an example of price functioning as

Question

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Price functions as an incentive when it encourages producers to supply more of a good or service. In this case, the rising average price of noodles in the city incentivized Jane to produce more bowls of noodles and raise her price.

Jane Sells Bowls of Noodles for $6 at Her Noodle