Question

In a free market economy, what signal do high prices send?(1 point)

Producers should supply more and consumers should buy less.

The government should intervene to protect consumers.

Producers should supply less and consumers should buy less.

Producers should supply less and consumers should buy more.
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Answer 1

Producers should supply more and consumers should buy less.

Explanation: High prices signal scarcity or strong demand, encouraging firms to increase supply (seek profit) and prompting consumers to reduce quantity demanded.