Conveys information about the relative scarcity of a good, such as whether a shortage or a surplus exists. select the correct answer below: a) supplyb) demandc) elasticityd) price

Price conveys information about the relative scarcity of a good, such as whether a shortage or a surplus exists.

Option D

Explanation:

When there is an increase in prices in the market, it indicates that supply for that particular has come down relative to its demand. With an example on this which was witness in the year of 2010, there was a sudden rise in Onion prices across Indian markets and the major reason for the same can be attributed to the reduced production of Onions due to errant rainfall in major regions of Maharashtra that produce Onions. So, when a commodity has high demand and is produced at a large scale, a reduced supply hikes the prices.                                                                                                                                                                                                                                                

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