Buyers and sellers receive information about what should be bought and what should be produced
Part 2
A.
from prices in a market system.
B.
by listening to TV news programs.
C.
from newspaper gossip columns.
D.
from friends and family.
A. From prices in a market system.
The correct answer is A. Buyers and sellers receive information about what should be bought and what should be produced from prices in a market system.
In a market system, the interaction between buyers and sellers is primarily determined by the forces of supply and demand, which are reflected in market prices. Prices help to convey information about the scarcity of goods and services and the preferences of consumers, which in turn influence the decisions of both buyers and sellers.
When prices of a particular product or service increase, it signifies that the demand for that item is high relative to the available supply. This information encourages producers to increase production and/or supply, as they can anticipate higher profits. Conversely, when prices decrease, it suggests that there is less demand for a product, prompting producers to adjust their production levels accordingly.
Buyers too rely on price information to make purchasing decisions. When prices for a product or service rise, it indicates that it might be more expensive or in higher demand, which could influence a buyer's decision to purchase or seek alternatives. On the other hand, lower prices may make a product more affordable and attractive to buyers.
In summary, the prices in a market system play a crucial role in providing buyers and sellers with information about what goods and services are in demand and what should be produced. Therefore, option A is the most accurate answer.