The Market Price of a Factor of Production That Is

question 256

True/False

The market price of a factor of production that is in fixed supply is determined only by demand.

---

Definitions:

Market System

A financial system where investment, production, and distribution decisions are dictated by price signals resulting from the interplay of supply and demand forces.

Fundamental Question

Fundamental Question refers to the basic questions any economic system must answer, which include what to produce, how to produce, and for whom to produce.

Guiding Function

The role of prices in directing the allocation of resources and goods in an economy, ensuring resources are used where they are most valued.

Dollar Votes

The concept that consumers show their preferences and influence the market through where they choose to spend their money.