Economics 9708 · AS & A Level · Behavioural economics

Behavioural economics — practice question

Under what conditions does the price mechanism cease to operate as a system for allocating goods?

  • Awhen the government bans advertising
  • Bwhen the government maintains an effective maximum price
  • Cwhen there is a limited supply of the good
  • Dwhen there is a powerful company able to set the market price

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