Question

How does price serve as an incentive in a market economy?

A)
Buyers demand more at higher prices.
Buyers purchase less at lower prices.
C)
Buyers purchase more at lower prices.
D)
Buyers purchase more at higher prices.

Answer 1

C) Buyers purchase more at lower prices.

Step-by-step explanation:

The question is related to "demand" and "supply" in Economics. When prices of goods are low, the demand increases. This means that more buyers are willing to purchase the goods because they can afford it.

On the contrary, when prices of goods are high, the demand decreases. This means that the high price doesn't attract the buyers, thus decreasing the demand.

So, this explains the answer.