Question

Explain how prices act as signals to producers and consumers.

Answer 1

Sample Response: Prices can act as a signal to both producers and consumers. A high price tells producers that a product is in demand and they should make more. A high price tells consumers to think about their purchases more carefully. A low price indicates to consumers to buy more of the product.

Step-by-step explanation:

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Answer 2

Prices can act as a signal to both producers and consumers:A high price tells producers that a product is in demand and they should make more. A high price tells consumers to think about their purchases more carefully. A low price indicates to consumers to buy more of the product.

Step-by-step explanation: