Question

The rationing function of prices means that

A) buyers and sellers synchronize their decisions through the price system
B) all goods and services are produced by large firms
C) government is responsible for setting the prices of basic foods.
D) businesses determine what goods consumers should purchase.

Answer 1

Answer:

A) buyers and sellers synchronize their decisions through the price system

Explanation:

Buyers are affected by the price mechanism and generally demand less at higher prices while sellers offer more when the price is higher. This provides a rationing mechanism that is not controlled by a central authority.