Question

Prices can act as a signal for consumers when they rise, this signals that they should buy more goods.

true or false

Answer 1

Prices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives. Higher prices for a good or service provide incentives for buyers to purchase less of that good or service and for producers to make or sell more of it.

Step-by-step explanation:

A price signal is information conveyed to consumers and producers, via the price charged for a product or service, which provides a signal to increase or decrease quantity supplied or quantity demanded.

Answer 2

False.

Step-by-step explanation:

The price level of goods and services affects the demand of them and they are sign for consumers. When prices go up people are less willing to buy goods and when they go down people are more willing to buy goods. So, according to this, the claim that prices can act as a signal for consumers when they rise, this signals that they should buy more goods is false.