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- Subject
- Supply and Demandeconomics-mcqs › supply-and-demand
- Published
- 29 May 2019
- Last updated
- 28 May 2026
In an unregulated market, rising prices allocate goods to individuals who have both the willingness and financial ability to purchase them. What is this mechanism called?
Multiple choice question for Supply and Demand. Select an option, then review the explanation below.
Explanation
When markets function without external controls, higher prices serve to ration limited goods to those buyers who value them most and can afford to pay, a process known as price rationing.
More Supply and Demand MCQs
Practice related questions from the same subject.
- 1.What is the typical shape of a demand curve?
- 2.What term describes a company earning profits beyond its normal profit level?
- 3.How does an increase in marginal cost affect output, and how does an increase in marginal revenue impact output?
- 4.Marginal revenue refers to the ________ resulting from producing an additional ________ of output.
- 5.What are firms generally assumed to do with their costs and profits?