The Role That Prices Play in Directing Resources Away from Overcrowded

question 83

Multiple Choice

The role that prices play in directing resources away from overcrowded markets and towards markets that are underserved is known as the ________ function of price.

• A)allocative
• B)market
• C)rationing
• D)transitive

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Definitions:

Pollution Abatement

Actions or measures taken to reduce, control, or eliminate pollution and its negative impacts on the environment.

Socially Optimal

A condition or output level where the social welfare is maximized, taking into account both the benefits to consumers and the costs to producers.

Marginal Benefit

The additional satisfaction or utility that an individual gains from consuming one more unit of a good or service.

Marginal Cost

The cost of producing one additional unit of a good or service, critical for decision-making on production and pricing.