The price of a good or service:
A) Never has an impact on the market mechanism.
B) Serves as the essential signal of the market mechanism.
C) Sometimes plays a role in the market mechanism.
D) Rarely has an impact on the market mechanism.

Question

Quizplus · Accepted Answer

The price of a good or service serves as the essential signal of the market mechanism. It communicates information about supply and demand to producers and consumers, helping to allocate resources and determine market outcomes. While other factors may also impact the market mechanism, such as government policies or technological changes, price is a key driver of market behavior. Therefore, choice B is the best answer.

The Price of a Good or Service