When Free Markets Ration Goods with Prices, It Is Both

question 224

True/False

When free markets ration goods with prices, it is both efficient and impersonal.

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Definitions:

Efficient Price

A price that reflects all available information and makes the best use of resources, minimizing waste and maximizing value.

Market Output

The total quantity of goods and services produced and supplied by firms in a market at a given price level and time period.

External Benefit

A positive effect experienced by individuals or groups who are not directly involved in an economic transaction or activity.

Market Price

The existing rate at which an item or service may be traded or acquired in a commercial setting.