The decision about what goods and services will be produced in a market economy is made by
A)lawmakers in the government voting on what will be produced.
B)workers deciding to produce only what the boss says must be produced.
C)producers deciding what society wants most.
D)consumers and firms choosing which goods and services to buy or produce.
E)consumers dictating to firms what they need most.

Question

Quizplus · Accepted Answer

In a market economy, the decision about what goods and services will be produced is made by consumers and firms choosing which goods and services to buy or produce. This is done through market demand and supply, where firms produce goods and services that are in high demand by consumers, and consumers buy the goods and services that they need or want. The market price of goods and services also plays a key role in determining what is produced, as firms will only produce goods and services that are profitable to them.

The Decision About What Goods and Services Will Be Produced