Price plays a number of functions in the allocation of resources.
Which statement best illustrates the function that relies upon consumer choice (sometimes known as the incentivising function)?
1 )
A price fall can show consumers that a good is becoming less popular.
A price fall tends to persuade some producers not to stay in the market for the good.
3 )
A price rise means consumers cannot afford to buy so much of a good.
4 )
A price rise tends to reduce competitiveness in the market for a good.
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