Answer: a.)Guiding function of prices
Explanation:
The laws of supply and demand work such that when a good is in shortage, the prices go up to reflect that it is not more valuable because it is now more rare and when the good is in surplus, the prices go down to reflect that it is not as valuable.
Producers would therefore react accordingly to these prices to either increase the supply in case of a shortage or reduce supply in the case of a surplus. This process is called the Guiding function of price as the prices guide producers on what to do.
