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8 April, 07:18

The market mechanism:

a. Is not a very efficient means of communicating consumer demand to the producers of goods and services.

b. Works through central planning by government.

c. Eliminates market failures created by government.

d. Works because prices serve as a means of communication between consumers and producers ...

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Answers (1)
  1. 8 April, 07:46
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    works because prices serve as a means of communication between consumers and producers.

    Explanation:

    Market mechanism is the money is used as a medium of exchange between buyers and sellers in a open system of value (market).

    In the market mechanism consumers are interested in maximising utility, while sellers want to maximise profit.

    Demand and supply mechanics works to properly allocate resources according to fluctuations in price.

    So market mechanism is successful because price has become a means of communication between buyers and sellers in their mission to maximise utility and profit.
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