Question

In a market economy, what do low prices indicate?

Answer 1

Answer:

D). An abundant supply of the good or service.

Explanation:

As per the fundamental principles of economics, when the aggregate supply for a specific good or service overtakes the aggregate demand for that product or service, the prices are inclined to fall. The excess or abundant supply and lower demand cause disbalance in the equilibrium and thus, the prices are dropped down to below equilibrium price. Thus, option D is the correct answer.