A-LevelEconomicsThe price system and the microeconomy9708/12 · May/June 2023 · Q51 Mark
Price plays a number of functions in the allocation of resources. Which statement best illustrates the function that relies upon consumer choice (sometimes known as the incentivising function)?
Aprice fall can show consumers that a good is becoming less popular.
Bprice fall tends to persuade some producers not to stay in the market for the good.
Cprice rise means consumers cannot afford to buy so much of a good.
Dprice rise tends to reduce competitiveness in the market for a good.
✓ Correct answer
B: price fall tends to persuade some producers not to stay in the market for the good.
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