Higher prices may serve the public interest when:
A)there is a shortage of goods or services available
B)there is an uneven distribution of traffic on alternate routes
C)higher prices never serve the public interest
D)both a and b

Question

Higher prices may serve the public interest when:
A)​there is a shortage of goods or services available 
B)​there is an uneven distribution of traffic on alternate routes 
C)​higher prices never serve the public interest 
D)​both a and b

Quizplus · Accepted Answer

When there is a shortage of goods or services available (option A) and the demand for those goods or services is higher than the supply, higher prices can serve the public interest by encouraging consumers to use those goods or services only when they really need them or helping to distribute them evenly among users.

Similarly, when there is an uneven distribution of traffic on alternate routes (option B), higher prices can help to reduce traffic congestion by encouraging travelers to use less congested routes.

Therefore, options A and B are both valid scenarios where higher prices may serve the public interest, making choice D the correct answer.

Higher Prices May Serve the Public Interest When