Question

What are the four characteristics of the Price System?

Answer 1

Flexible that's when market conditions change, so do prices. Efficient that's resources are allocated efficiently since price adjust until the maximum number of goods and services are sold. Market driven that's Market forces not government policy determine prices. in effect the system runs itself. Neutral that's when both consumer and producer make choices that determine equilibrium price.

Answer 2

The four characteristics of the Price System are

· Neutral

· Market-Driven

· Flexible

· Efficient

Explanation

It is neutral because the prices isn't in favor of the manufacturers or consumers will.

It is market-driven because, for each product, the market determines the price which depends on the productivity of the product.

It is flexible because as seen in the previous factor, when market conditions vary, prices adapt instantly.

It is efficient because the prices of products adjust to the sale level increasing chances of profit.