Ask Question
24 May, 15:56

How do prices act as signals to allocated goods, services, and productive resources in a market economy?

High prices act as an incentive to drive demand higher.

B) Low prices act as an incentive for producers to increase inventories.

C) Low prices act as an incentive to drive consumers to substitute goods and services.

D) High prices act as an incentive to increase the supply of a good, service or productive resource.

+2
Answers (1)
  1. 24 May, 16:21
    0
    D) High prices act as an incentive to increase the supply of a good, service or productive resource.

    Explanation:

    High prices means that there is more profit being made from a product due to which it's demand is more in the market. As a result, these kind of products will have an increased suppl and will be readily available in the market. However, high prices can also lead to the customers finding for a substitute for the goods and the services.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “How do prices act as signals to allocated goods, services, and productive resources in a market economy? High prices act as an incentive to ...” in 📗 Geography if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers