The ability of the competitive forces of supply and demand to establish a price at which selling and buying decisions are consistent is called the rationing function of prices.
Rationing function of price is used to measure the goods that consumer can use their money to buy.
When their is scarcity of goods in the market this means that demand will be above supply and the outcome is that price of goods will tend to increase or bid up.
Therefore the ability of the competitive forces of supply and demand to establish a price is called the rationing function of prices.
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