Prices communicate information about relative availability of products. For example, a decrease in the price of corn signals to consumers and producers that:
A)consumers are buying more corn than before.
B)corn is relatively more abundant than before.
C)corn is relatively less abundant than before.
D)consumers are stocking up on corn because of the predictions of a cold winter.

Question

Prices communicate information about relative availability of products. For example, a decrease in the price of corn signals to consumers and producers that:
A)​consumers are buying more corn than before.
B)​corn is relatively more abundant than before.
C)​corn is relatively less abundant than before.
D)​consumers are stocking up on corn because of the predictions of a cold winter.

Quizplus · Accepted Answer

A decrease in price indicates that there is a relatively larger supply of corn in the market compared to the demand, making it relatively more abundant than before.

Prices Communicate Information About Relative Availability of Products