In a market economy,

Question

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In a market economy, both households and firms make decisions. Households decide which firms to work for, based on their preferences and wages offered by firms. They also decide what to buy with their incomes, based on their preferences and prices of goods and services. Firms, on the other hand, decide whom to hire, based on their skills and wages offered by the firm. They also decide what to make, based on the demand for their products, prices of inputs, and potential profits. Therefore, both choices A and B are correct. Choice C is incorrect because a market economy does not have a central planner making decisions about production and consumption.

In a Market Economy