117k views
4 votes
Falling prices send signals to consumers
To

User Ben Nyberg
by
8.4k points

1 Answer

6 votes
Rising prices give a signal to consumers to reduce demand or withdraw from a market completely, and they give a signal to potential producers to enter a market. Conversely, falling prices give a positive message to consumers to enter a market while sending a negative signal to producers to leave a market.
User Abkrim
by
7.4k points