Option '' c ''
bcz capitalist economy uses price mechanism or market mechanism for allocation of resources

Capitalistic Economy uses Price as the principal means of allocating resources.

Explanation:
In a capitalistic economy, resources are allocated based on the principle of supply and demand, which is determined by the price mechanism. The price of goods and services plays a crucial role in determining the allocation of resources. Here's how:

1. Supply and Demand:
- In a capitalistic economy, the market forces of supply and demand determine the prices of goods and services.
- Supply refers to the quantity of a product or service that producers are willing to offer at a given price, while demand refers to the quantity of a product or service that consumers are willing to buy at a given price.
- The interaction between supply and demand establishes an equilibrium price, at which the quantity demanded equals the quantity supplied.

2. Role of Price:
- Price acts as a signal in a capitalistic economy. It conveys information about the scarcity of resources and the preferences of consumers.
- When the demand for a particular product or service increases, the price tends to rise, signaling producers to allocate more resources towards its production.
- Conversely, if the demand for a product or service decreases, the price tends to fall, indicating producers to reallocate resources to other areas where demand is higher.

3. Resource Allocation:
- Price serves as an incentive for producers to allocate resources efficiently.
- When the price of a product or service is high, it indicates that there is a scarcity or high demand for it. This prompts producers to increase the production of that particular product or service.
- On the other hand, when the price of a product or service is low, it suggests that there is an oversupply or low demand. Producers, in response, may reduce production or reallocate resources to more profitable areas.

In conclusion, a capitalistic economy relies on the price mechanism to allocate resources. The interaction between supply and demand determines the prices of goods and services, which, in turn, guides producers in allocating resources efficiently.