The following text is from an economics article.
Supply and demand determine prices in market economies. When demand for a product exceeds supply, prices typically rise. Conversely, when supply exceeds demand, prices tend to fall. This self-regulating mechanism helps allocate resources efficiently without central planning.
Which choice best describes the function of the last sentence?
It introduces a completely new economic concept.
It contradicts the examples given in previous sentences.
It explains the broader significance of the mechanism described.
It provides statistical data about market prices.
Correct Answer: C
Choice C is the best answer. The last sentence explains the broader significance—that this mechanism allocates resources efficiently without central planning.
- Evidence: The sentence states: "This self-regulating mechanism helps allocate resources efficiently without central planning."
- Reasoning: It moves from the specific mechanics (supply/demand) to the general importance (resource allocation).
- Conclusion: The function is to explain this broader significance.
💡 Strategy: Look for summary phrases like "This mechanism helps..." which often indicate significance.
Choice A is incorrect because it elaborates on the same concept. Choice B is incorrect because it supports, not contradicts. Choice D is incorrect because no statistics are provided.