Question

What Are the Benefits of the Price System?

Answer 1

The benefits of the price system are as follows:

1. It informs the producers how much their product will cost to make.
2. It encourages the producers to supply more as prices are high.
3. As there will be more competitors, it gives the customers more choices in the market.
4. It promotes efficient use of resources and produces products that customers want.
5. Price system can cope up with the demand changes that fluctuate overnight.

Also read:

• MCQs on Consumer Price Index CPI

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