In a free market economic system, the mechanism of __________ is the key determinant used to signal to producers what to produce and how much to produce.
A) the market curve
B) trend
C) price
D) quantity

Question

Quizplus · Accepted Answer

In a free market economic system, the mechanism of price is the key determinant used to signal to producers what to produce and how much to produce. The demand and supply forces determine the market price, and producers adjust their production accordingly to maximize profits. The higher the price, the higher the incentive for producers to increase their output, and vice versa. Therefore, the price mechanism is a crucial component of the free market system.

In a Free Market Economic System, the Mechanism of __________