The market mechanism
A)Is not a very efficient means of communicating consumer demand to the producers of goods and services.
B)Works through central planning by government.
C)Eliminates market failures created by government.
D)Works because prices serve as a means of communication between consumers and producers.

Question

Quizplus · Accepted Answer

The market mechanism works through the price system, where prices act as signals to producers regarding the demand for goods and services from consumers. This efficient communication helps in allocating resources and goods effectively. Therefore, option D is the correct answer. Options A, B, and C are incorrect because they are opposite to the actual mechanism of the market.

The Market Mechanism