What is not a function of prices in a market economy?
prices allow income to be distributed equally
prices ration scarce resources among economic agents
prices rise and fall to reflect shortages and surpluses
prices send information to consumers and producers
Some markets in Belgium are in equilibrium. The country produces a wide range of goods and services with different degrees of price elasticity of demand. The Belgian Government wants the economy to move to a production possibility point beyond its current production possibility curve (PPC). Belgium's scientific industry is one industry which is doing well. Workers in this industry are highly specialised.
Define market equilibrium.
The diagram shows the market for a product.
Which distance shows a market disequilibrium caused by excess supply?
U to V
to X
V to W
X to W