A primary function of prices in a market economy is to provide participants with
A)relevant economic information.
B)relevant spending limits.
C)an equitable distribution of goods and services.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Prices in a market economy act as signals, conveying relevant economic information to buyers and sellers about the availability, scarcity, and value of goods and services. Prices help allocate resources and influence the behavior of market participants. While prices can indirectly affect spending limits and contribute to an equitable distribution of goods and services, those are not the primary functions of prices in a market economy.

A Primary Function of Prices in a Market Economy Is