How good are markets at organizing economic activity?

Question

Quizplus · Accepted Answer

While markets are not perfect and can result in failures such as market monopolies, overall they have proven to be an efficient way to allocate resources and produce goods and services that are demanded by consumers. This is due to the price mechanism that allows for supply and demand to determine the quantity of goods and services produced, as well as the incentives created for producers to innovate and improve their products to better compete in the marketplace. Central planning, on the other hand, has historically led to inefficiencies and shortages, as the planners cannot possibly know and account for all the individual preferences and needs of consumers.

How Good Are Markets at Organizing Economic Activity