Concept:The price mechanism allocates resources through demand and supply, using price signals to guide economic decisions.
Explanation:Under this system, producers respond to profitable prices and consumers respond to affordable prices.
A major criticism is that the price mechanism distributes goods according to purchasing power and not according to the real needs of consumers.
Individuals with high incomes can command more goods and services.
Those with lower incomes are unable to express effective demand for many essential items, even if their need is greater.
Consequently, production is directed toward satisfying the wants of the rich while the poor become more deprived.
This market outcome therefore worsens the unequal distribution of income and wealth in society.
That is why the price mechanism is often criticised for widening the inequitable gap in the economy.
Answer:C. it widens the inequitable gap.