The task of deciding which consumer gets each of the goods produced in a free-market economy is solved by
A)the price system.
B)the industries which produce the goods.
C)the central planners.
D)citizens with political power.

Question

Quizplus · Accepted Answer

In a free-market economy, the task of deciding which consumer gets each of the goods produced is solved by the price system. The price system determines the equilibrium price where the quantity of goods supplied is equal to the quantity of goods demanded. Consumers with a willingness to pay the highest price will be able to purchase the goods, while those who are unwilling to pay the market price will be excluded from the market. This process allocates goods to those who value them the most, based on the concept of consumer sovereignty.

The Task of Deciding Which Consumer Gets Each of the Goods