Competitive markets usually promote the efficient use of resources.This is because:
A)resource owners bear the wealth effects of their decisions.
B)managers always have the proper incentives to make decisions.
C)consumers price makers
D)markets usually make equitable choices first.

Question

Quizplus · Accepted Answer

In competitive markets, resource owners bear the wealth effects of their decisions. This means that they will optimize the use of their resources to maximize profits, leading to efficiency in resource allocation. Managers may not always have the proper incentives to make decisions, and consumers are not always price-makers. Markets do not necessarily make equitable choices first; instead, they prioritize efficiency.

Competitive Markets Usually Promote the Efficient Use of Resources