The essential feature of the market mechanism is:
A) That every consumer is concerned about the welfare of others.
B) The price signal for both consumers and producers.
C) Equity in the distribution of income and housing.
D) Government taxation of profits.

Question

Quizplus · Accepted Answer

The market mechanism relies on the price signal to coordinate the decisions of consumers and producers. As prices adjust, consumers are able to make choices that reflect their preferences, and producers are able to make decisions about how to allocate resources to create goods and services that are in demand. This price coordination is the essential feature of the market mechanism. Choices A, C, and D do not accurately describe this feature.

The Essential Feature of the Market Mechanism Is