How does the marketplace act to allocate resources

Question

Quizplus · Accepted Answer

The marketplace allocates resources efficiently by allowing prices to adjust to reflect supply and demand. When resources are scarce, prices increase, signaling to consumers to reduce consumption, and to producers to increase production. This helps ensure that resources are used in the most productive manner and that goods and services are produced at the lowest possible cost. Fairness and equity are subjective and not a direct function of market allocation. Likewise, the market doesn't necessarily allocate resources evenly.

How Does the Marketplace Act to Allocate Resources