Final answer:
The supply-and-demand price system creates scarcity, does not eliminate scarcity, does not determine a commodity's current value based on past production cost, and solves the problem of alternative applications of labor and capital.
Step-by-step explanation:
The supply-and-demand price system has several characteristics. First, it creates scarcity because prices reflect the relative scarcity of goods and services. When the demand for a product is high and the supply is limited, the price increases, leading to scarcity. On the other hand, when the supply is high and the demand is low, the price decreases.
Second, the supply-and-demand price system does not eliminate scarcity. It is a mechanism that helps determine the allocation of scarce resources, but it does not eliminate scarcity itself.
Third, the amount that a commodity cost to produce in the past does not determine its current value. The price of a commodity is determined by the current demand and supply conditions in the market, not by its past production cost.
Lastly, the supply-and-demand price system solves the problem of alternative applications of labor and capital. It helps allocate resources to their most efficient uses by guiding producers and consumers to make decisions based on the relative prices of goods and services.