7
Question
Price mechanism incorporates _________ in a market economy.
Price mechanism incorporates _________ in a market economy.
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Solution
The correct option is C flexibility
Price mechanism
refers to the mechanism where price directs the flow of goods and services in
the market as it directs the supply by the production sector i.e. supply will
increase if price increases and vice-versa and the demand sector i.e. demand
will increase if price decreases and vice-versa. Therefore, it adds more flexibility to the market economy because in market economy prices affect by the forces of demand and supply.
Price mechanism refers to the mechanism where price directs the flow of goods and services in the market as it directs the supply by the production sector i.e. supply will increase if price increases and vice-versa and the demand sector i.e. demand will increase if price decreases and vice-versa. Therefore, it adds more flexibility to the market economy because in market economy prices affect by the forces of demand and supply.
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