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.