Prices serve the public interest by
A)making resource owners wealthy.
B)rationing scarce resources.
C)keeping poor people from purchasing more than they can afford.
D)forcing the government to participate in the market.

Question

Quizplus · Accepted Answer

Prices ration scarce resources by signaling to consumers how much of a good or service is available and at what cost. This helps to ensure that the limited supply of resources is allocated efficiently to those who value them the most. Prices also provide an incentive for producers to supply more of a good or service when demand is high, and less when demand is low, leading to a more balanced market. While resource owners may benefit from higher prices, the main purpose of prices is not to make them wealthy, but rather to allocate resources efficiently for the benefit of society as a whole. Prices do not necessarily keep poor people from purchasing what they need, but rather help to ensure that resources are used in the most efficient way possible. Prices also do not force the government to participate in the market, although they may influence government policies and regulations related to certain goods or services.

Prices Serve the Public Interest by