Question

In a free market, prices lead to an efficient allocation of resources. In other words, _____. A. people who own resources are unable to bargain with people who wish to buy resources B. the government decides who controls natural resources C. consumers can buy unlimited amounts of any good they like at a price of their choice D. resources are used in the most productive way, based on the needs of consumers and producers

Gradpoint Student Selected Correct
D.
resources are used in the most productive way, based on the needs of consumers and producers

Answer 1

In a free market, resources are used in the most productive way, based on the needs of consumers and producers.

Step-by-step explanation:

In a free market, prices lead to an efficient allocation of resources.

It means that resources are used in the most productive way, based on the needs of consumers and producers.

The prices in a free market serve as signals to producers and consumers about the availability and demand for goods and services.

When the price of a good or service increases, producers are motivated to allocate more resources towards its production, and consumers are incentivized to consume less of it.

On the other hand, when the price decreases, producers are encouraged to reduce production, and consumers may be able to afford more of the good or service.