The market mechanism:
a) Works through central planning by the government.
b) Is very inefficient since consumers cannot communicate directly with producers.
c) Uses prices as a means of communication between consumers and producers.
d) Eliminates market failures created by the government.
Answer: c) Uses prices as a means of communication between consumers and producers.
Economics
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A) demand for a factor is downward sloping. B) supply of a factor is upward sloping. C) supply and demand intersect. D) supply of a factor is horizontal.
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