The rationing function of prices refers to the:

A. fact that ration coupons are needed to alleviate wartime shortages of goods.
B. tendency of supply and demand to shift in opposite directions.
C. ability of the market system to generate an equitable distribution of income.
D. capacity of a competitive market to equate the quantity demanded and the quantity supplied.

ANSWER:

D. capacity of a competitive market to equate the quantity demanded and the quantity supplied.