The income of individuals reflects their provision of resources to others. As long as the preferences and productive abilities of individuals differ, a market solution will lead to an unequal distribution of income. An efficiently operating economy must communicate, coordinate, and motivate the actions of decision-makers. B. Communicating information to decision-makers 1. Prices and profits guide entrepreneurs.
Consumers call the tune as they respond to relative prices, thereby helping to determine prices.
Identifying profitable opportunities takes time and hence adjustment is not instantaneous, and never quite complete, since dynamic change never stops. A. Strongly negative secondary effects argue against controls. Decline in the supply of housing in the long run. Shortages and black markets develop. The quality of housing deteriorates 4.