Question 6
Price DeterminationThe supply of and demand for goods and services are influenced by the
- A.supermarkets
- B.entrepreneurs
- C.mechanism of the law
- D.mechanism of equilibrium
- E.price mechanism.
Show the answer and explanation
Answer: E (price mechanism.)
Explanation
In a market economy, price changes signal buyers and sellers and so govern how much is demanded and supplied; this is the price mechanism.