An important function of the price system is to?

A. ensure that producers’ profits remain high
B. guarantee full employment of resources
C. allocate resources to most productive uses
D. protect the economic interests of government

Correct Answer:

Option B – guarantee full employment of resources

Explanation

The distribution of scarce resources among competing producers is one of the main functions of price mechanism. Those indus­tries which can offer the highest prices for the factors of production are able to attract supplies.