In a market system, relative scarcities of resources are indicated by
A) supply and demand being out of equilibrium.
B) surpluses.
C) excess demand and excess supply.
D) relative market prices.

Question

Quizplus · Accepted Answer

In a market system, the relative scarcities of resources are indicated by the prices of goods and services. When a resource is scarce, its price will go up, reflecting the increased demand for it. Conversely, when a resource is abundant, its price will go down. Therefore, relative market prices are the best indicator of the scarcities of resources in a market system.

In a Market System, Relative Scarcities of Resources Are Indicated