Question on: JAMB Economics - 2022
In a free market economy, the rationing of scarce goods is done principally by?
A
the government
B
business organizations
C
the price mechanism
D
consumers
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Correct Option: C
Option C is the correct answer.
In a free market economy, the price mechanism is used to ration scarce goods. When a good becomes scarce, its price rises, encouraging consumers to buy less and producers to supply more, which helps allocate the limited resources to their most valued uses.
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