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1.A) Which of the following could cause a long-run shift in demand as part of the...

1.A) Which of the following could cause a long-run shift in demand as part of the "guiding function of price"?

a change in tastes and preferences

an increase in price caused by a shift in supply

income shift caused by an economic recession

an increase in number of buyers
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Answer #2

an increase in price caused by a shift in supply-Guiding function of price. Also referred to as the allocating function of price, the movement of resources as a result of changes in the equilibrium market price. This is a long-term function. change in supply when demand is constant shifts the supply curve to the right, which results in an intersecting point that gives lower prices and higher quantity. A negative change in supply shifts the curve to the left, causing prices to rise and the quantity to decrease.

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