Signalling function
What Signalling function means in Economics A-Level, as defined for AQA.
Definitions of Signalling function
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Reference: AQA
Prices adjust to demonstrate where resources are required, acting as a communication tool between consumers and producers.
The role of a price change in acting as a signal to consumers, such as a falling price signalling consumers to buy more.
Topics that use Signalling function
- How markets and prices allocate resources (AQA A-Level)
- The determination of equilibrium market prices (AQA A-Level)
Related terms
- Incentive function
- Price mechanism
- Asymmetric information
- Ceteris paribus
- Disequilibrium
- Economic efficiency
- Economic incentives
- Economic shocks
Using Signalling function in the exam
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