Which of the following is true of a freely functioning market?
A)Markets lead to morally correct outcomes.
B)Market allocation leads to the most equitable distribution of resources.
C)Market outcomes are decided by firms.
D)Markets move resources to where they are least valued.
E)Markets do not allow obsolescence and inefficiency to thrive.

Question

Quizplus · Accepted Answer

Freely functioning markets ensure that inefficient and obsolete firms are driven out due to competition, leading to an efficient allocation of resources. However, it is not necessarily true that markets lead to morally correct outcomes, the most equitable distribution of resources, or that market outcomes are solely decided by firms. Additionally, markets aim to allocate goods and resources to where they are most valued rather than least valued, hence choice D is incorrect.

Which of the Following Is True of a Freely Functioning