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Question
Price is functioning as a signal when it summarizes all that is happening in the market. creates incentives for changes in production and consumption. broadcasts useful information. is a line of communication between buyers and sellers in a market.

Asked By TwilightWhisper29 at

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Don

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Step 1/2

A price signal is a message conveyed by the cost of a product or service, indicating information about its increase or decrease in the quantity supplied or quantity demanded.

Step 2/2

The high price in the market tells the producer that there is high demand for that product and it should earn more. This high price will tell the customers to make proper decision making. The prices will adjust with the sources available for production. The scarcity and surplus in the market will be depicted through the ups and downs in the price level. If the price increases with higher demand for the product, then the sellers will tend to raise the level of business and expand the production to meet the demand.

Final Answer

Therefore, the correct solution is option D , i.e. is a line of communication between buyers and sellers in a market.

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