The economic system in which producers and consumers control production and allocation decisions through supply and demand is called
A) a centrally planned economy.
B) privatization.
C) a market economy.
D) communism.
E) socialism.

Question

Quizplus · Accepted Answer

A market economy is characterized by the interaction of buyers and sellers in determining the quantity, price, and distribution of goods and services. Producers and consumers control production and allocation decisions through the forces of supply and demand. In contrast, a centrally planned economy (A) is one where the government controls all aspects of production and distribution, while privatization (B) refers to the transfer of government-owned assets or services to the private sector. Communism (D) and socialism (E) are both economic systems that involve greater government control over production and distribution than a market economy.

The Economic System in Which Producers and Consumers Control Production