Say's law implies that
A) wages and prices are not flexible.
B) people supply goods and services to the market because they want to consume other goods and services.
C) government regulation is needed to prevent shortages from becoming a problem.
D) government regulation is needed to prevent surpluses from becoming a problem.

Question

Quizplus · Accepted Answer

Say's law states that production creates its own demand, meaning that producers supply goods and services to the market because they want to consume other goods and services. This implies that as long as production is taking place, people will have income to spend on other goods and services, thus avoiding the problem of shortages or surpluses. Say's law does not address the flexibility of wages and prices, nor does it suggest that government regulation is needed to manage market outcomes.

Say's Law Implies That