Concept:The price system uses changes in price to coordinate the activities of producers and consumers.
Explanation:No central authority is needed to direct buyers and sellers in a free market.
Consumers show their preferences by the prices they are willing to pay for goods.
Producers show the availability of goods by the prices they are willing to accept.
When demand is greater than supply, price rises, which encourages production and reduces consumption.
When supply is greater than demand, price falls, which encourages consumption and reduces production.
In this way, price continually adjusts production and consumption until a balance is reached.
Answer:D. regulates production and consumption.