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Questions and Answers
Which one of the following is a function of price mechanism
Which one of the following is a function of price mechanism
- To create an incentive to customers to decrease the quantity supplied when price increases
- To encourage government intervention to allocate resources
- To provide a signal to producers and consumers about changes in supply and demand when prices change (correct)
- To ration scarce resources by allowing price to decrease when demand increase
which one of the following is a govt failure
which one of the following is a govt failure
- Excessive administration costs involved in meeting environmental regulations (correct)
- A market bubble causing the price to rise excessively
- the existence of free riders leading to the under production of public goods
- Under production of foods with external benefits
