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True or false. The primary functions of price in a free market are to inform, direct, and motivate consumers and firms.
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20 votes
True or false. The primary functions of price in a free market are to inform, direct, and motivate consumers and firms.

User Dkim
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21 votes
21 votes

Answer:

True

Step-by-step explanation:

Prices in a free market co-ordinate the buying and selling decisions in the market. In their rationing role, prices inform the distribution of goods and other resources throughout the economy. Prices motivate firms by acting as incentives that provide a standard of measure of value throughout the world. Prices direct producers and consumers, thereby acting as signals to educate producers and consumers on how to adjust their production and consumption decisions.

User MRah
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