Economics (AS & A Level) · May / June 2022 · Paper 13 · Question 9
9708Efficiency and market failure
What is necessary to achieve the best allocation of resources using the price mechanism?
- AProducers can maximise their collective interest.
- BConsumers and producers must have perfect knowledge.
- CThe government must be able to apply maximum and minimum prices.
- DThe value of the price elasticity of supply must be greater than one.
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Correct answer: B. Consumers and producers must have perfect knowledge.
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