The following is an example of the market allocation mechanism

Question

Quizplus · Accepted Answer

The $5 pizza special at the nearby-campus pizzeria is an example of the market allocation mechanism. The price of the pizza is determined by supply and demand in the marketplace. Customers who value the pizza at or above $5 will buy it, while those who do not value it at that price will not. The market mechanism allocates the product (the pizza) to those who are willing and able to pay for it. Long lines for the new Apple iPad and raffle drawing for a trip to Hawaii are not purely market-driven, as they involve chance or limited availability. The American interstate freeway system is a government-funded project, not a market-driven allocation system.

The Following Is an Example of the Market Allocation Mechanism