The Allocative Function of Price Is To

question 140

Multiple Choice

The allocative function of price is to:

• A)distribute scarce goods and services to those consumers who value them the most highly.
• B)ensure that firms in perfectly competitive markets earn an economic profit.
• C)direct resources away from markets that are overcrowded and toward markets that are underserved.
• D)provide subsidies to low-income families so they can purchase essential goods and services.

---

Definitions:

Withholding Their Labor

A form of protest or collective bargaining where workers refuse to work to gain leverage over their employer, typically for better wages or working conditions.

Extract Concessions

The act of obtaining something of value through negotiation or pressure, especially in a political or business context.

Negotiations

The process of discussing and reaching an agreement between parties with differing interests or perspectives, often involving compromise or conciliation.

Resource Mobilization Theory

A theory in social movements highlighting the importance of resources such as money, labor, and social connections for success.