In a market system,
A) ﬁrm owners and employees share business risk more or less equally.
B) a ﬁrm's employees and suppliers are largely shielded from risk, relative to business owners.
C) employees and suppliers face the greatest risks, because ﬁrms can shut down without notice and leave them unpaid.
D) a ﬁrm's owners are largely shielded from risk because they can walk away from the business at any time.

Question

Quizplus · Accepted Answer

In a market system, the main risk-takers are the firm owners as they invest their own resources and capital to start and operate the business. On the other hand, the employees and suppliers are largely shielded from risk, as they have contracts and legal protections that ensure they will be paid for their services, regardless of the success or failure of the business. However, if a firm shuts down unexpectedly, employees and suppliers may face some temporary financial difficulties but they are not obliged to bear business risk like the firm owners.

In a Market System