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Aarun ECON (Theme 1) > LS16 - Price Mechanism > Flashcards

LS16 - Price Mechanism Flashcards

1
Q

Functions

A

Rationing
Signalling
Incentivise

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2
Q

Rationing

A

When supply drops price increases so only those who can afford it can buy it

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3
Q

Incentivise

A

Prices rises incentivise firms to focus production of that products for profit

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4
Q

Signalling

A

Price changes signal to producers whether to produce more or less

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Aarun ECON (Theme 1) (18 decks)

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