Asked by Victoria Ferguson on May 18, 2024

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The incentive function of prices:

A) indicates that price increases bring forth more of that resource.
B) is the idea that competitive markets will always clear.
C) applies to all resources.
D) only applies to land.

Incentive Function

The way in which economic rewards or penalties influence the actions of individuals and firms.

Competitive Markets

Markets where multiple firms are in rivalry to attract consumers, characterized by free entry and exit, leading to efficient outcomes.

Price Increases

An upward adjustment in the cost of goods or services, typically reflecting higher production costs or increased demand.

  • Comprehend the duties and workings of rent within an economic system.
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ZQ
Zachary QureshiMay 19, 2024
Final Answer :
A
Explanation :
The incentive function of prices indicates that as the price of a resource increases, producers are incentivized to produce more of it, thus bringing forth more of that resource. This applies to all resources, not just land. The idea that competitive markets will always clear (B) is related to the relationship between supply and demand, but not specifically to the incentive function of prices. Choice D is incorrect as the price incentive applies to all resources, not just land.