Relative price changes are a desirable and essential ingredient of the market mechanism.
Relative prices changes when there is a change in relative scarcity.

Question

Quizplus · Accepted Answer

When there is a change in relative scarcity of goods or services, it results in a change in their relative prices. This is an important aspect of the market mechanism as it signals to buyers and sellers how to allocate resources efficiently based on the changing supply and demand conditions. Thus, relative price changes are necessary for ensuring an effective functioning of the market system.

Relative Price Changes Are a Desirable and Essential Ingredient of the Market