Economics 9708 · AS & A Level · Demand and supply curves

Demand and supply curves — practice question

Price has several functions in the allocation of resources. Which statement most clearly shows the function that depends on consumer choice (also called the incentivising function)?

  • AA price fall can show consumers that a good is becoming less popular.
  • BA price fall tends to persuade some producers not to stay in the market for the good.
  • CA price rise means consumers cannot afford to buy so much of a good.
  • DA price rise tends to reduce competitiveness in the market for a good.

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