In a market economy, the distribution of output will be determined primarily by
A) consumer needs and preferences.
B) the quantities and prices of the resources that households supply.
C) government regulations that provide a minimum income for all.
D) a social consensus as to which distribution of income is most equitable.

Question

Quizplus · Accepted Answer

In a market economy, the quantity and price of resources that households supply will determine the distribution of output. As resources are allocated to those who are willing and able to pay for them, the resulting output will reflect the preferences and needs of consumers. The government may regulate some aspects of the economy, but it does not determine the distribution of output. Equitable distribution is often debated, but it is ultimately influenced by market forces.

In a Market Economy, the Distribution of Output Will Be