The market system is also called the price system because
A) rising prices are the signal to producers to offer more of a particular good.
B) people pay money in markets.
C) everything has a price tag.
D) inflation is a significant problem.

Question

Quizplus · Accepted Answer

The market system is a way of allocating goods and services where prices act as signals to both consumers and producers. Rising prices signal producers to increase the supply of a particular good as demand increases, while falling prices signal producers to decrease supply. Therefore, the market system is often referred to as the price system.

The Market System Is Also Called the Price System Because