Which of the following statements best describes the role played by prices in a command economy such as the former Soviet Union?
A) Prices were used to allocate resources.
B) Prices played the same role as in a market economy.
C) Prices were used to ration final goods and services but not to allocate resources.
D) Prices were not used at all.

Question

Quizplus · Accepted Answer

In a command economy like the former Soviet Union, prices were not used to allocate resources as the government controlled all production and distribution of goods. Instead, prices were used to ration final goods and services, meaning that the government set prices to influence the level of demand for products. However, the government did not allow market forces to determine prices as in a market economy.

Which of the Following Statements Best Describes the Role Played