Flexible prices ensure that:
A) resources are allocated to their highest-valued uses.
B) suppliers will always profit from necessity goods.
C) self-interested individuals will not interfere with the efficiency of the market.
D) prices will always be minimized.

Question

Quizplus · Accepted Answer

Flexible prices help to ensure that resources are allocated to their highest-valued uses because when the demand for a good or service increases, the price will rise, incentivizing suppliers to produce more and consumers to reduce their consumption. This ultimately results in a more efficient allocation of resources.

Flexible Prices Ensure That