https://padlet.com/20scotch/j0vh7gt8b95c 5th Period Economics en-us 2019-04-04 16:14:45 UTC 2025-09-25 05:29:59 UTC hello@padlet.com https://padlet-assets.s3.amazonaws.com/icons/Brightnessdown.png 20scotch https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605382 Consumers allow price to signal the opportunity cost of a purchase. You tend you make easy decisions when it comes to which product is cheaper. When the opportunity cost of buying is high, people tend to think carefully before parting with their money.

Prices also convey information to producers. Prices allow producers to gauge consumers preferences. If producers choose to make their product more expensive, they are taking the risk of letting the consumer choose if they want to buy their product or the product that´s cheaper.]]> 2019-04-04 16:18:39 UTC https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605382 20scotch https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605796 In a market-based economy, prices have an incentive because they represent possible profit. Increasing prices cause firms to produce more and encourage new firms to enter the market. Falling prices cause firms to produce less. 

Just as changing prices influences producers, prices in the form of wages and salaries motivate workers. The opportunity to earn a better deal can inspire people to enter the workforce or get a job that pays more. Low wages can act as disincentives for people to seek work.]]> 2019-04-04 16:19:21 UTC https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605796 20scotch https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605912 Prices allow markets to adjust when something interferes with the production of goods. Specifically natural disasters. 

When two hurricanes in the Gulf hit,gas prices fluctuated, sometimes wildly, as oil companies struggled to bring the quantity of gas demanded in line with what refiners were able to supply. By throwing the gasoline market into disequilibrium, Hurricanes Katrina and Rita illustrated the key role that prices play in correcting both shortages and surpluses.Prices give markets the flexibility they need to reach equilibrium even under changing conditions.]]> 2019-04-04 16:19:35 UTC https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605912 20scotch https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605984 The role of price in a market based economy is to guide resources to efficient uses. Products that are in greatest demand will be bought the most in order to make products to meet that demand. Guided by prices that communicate what consumers want, automatically allocate a scarce resource used to make many different products—to its most valued use.

Producers also use price to decide what to produce and how much. These decisions help with limited resources and efficiency.]]> 2019-04-04 16:19:44 UTC https://padlet.com/20scotch/j0vh7gt8b95c/wish/348605984