In a free-market economic system, ________ is the key determinant used to signal to producers what to produce and how much to produce.
A) the market curve
B) trend
C) price
D) quantity

Question

Quizplus · Accepted Answer

In a free-market economic system, prices serve as the key determinant to signal to producers what to produce and how much to produce. Prices are determined by the interactions of supply and demand in the market, and producers respond to changes in prices by adjusting their production accordingly. Higher prices signal to producers that there is greater demand for a particular good or service, and they may increase production to maximize profits. Lower prices, on the other hand, may signal a surplus of a particular good or service, prompting producers to reduce production or shift their resources towards other more profitable products.

In a Free-Market Economic System, ________ Is the Key Determinant