The adjustment of the ____________ is the rationing mechanism in market economies.

Question

Quizplus · Accepted Answer

In market economies, prices serve as the rationing mechanism because they determine how much of a good or service is produced and consumed. As the price of a good or service increases, consumers will demand less of it, and producers will supply more of it, resulting in a more efficient allocation of resources. Similarly, if the price of a good or service decreases, consumers will demand more of it, and producers will supply less of it, which also leads to a more efficient allocation of resources. Therefore, the adjustment of prices is the key mechanism in allocating resources in market economies.

The Adjustment of the ____________ Is the Rationing Mechanism in Market