Economics (AS & A Level) · Oct / Nov 2021 · Paper 12 · Question 8

What is an example of the rationing function of the price mechanism?

1. AWhen the price of a product is falling, firms will allocate less resources to its production.
2. BWhen the price of a product is falling, the government can set an effective minimum price.
3. CWhen the price of a product is rising, firms will expand production of the product to make profits.
4. DWhen the price of a product is rising, some consumers will no longer be able to buy it.

As printed in the paper