Price is important in a market economy because it

A) eliminates imbalances between supply and demand.
B) serves as the rationing mechanism for the limited supplies of goods and services.
C) coordinates the choices of consumers and producers and brings them into harmony.
D) is all of the above.

Market Economy

An economic system where supply and demand from consumers and businesses dictate the production and pricing of goods and services.

Supply and Demand

Fundamental economic model based on the idea that the price and quantity of a good or service is determined by the availability (supply) and desire (demand) of that good or service.

Rationing Mechanism

A system used to allocate scarce goods and services using criteria other than price.