According to critics,centrally planned economies fail to attain Pareto optimality because of:
A)the difference in the interests of the policy makers and the public.
B)the lack of efficient and skilled manpower in centrally planned economies.
C)the inability of policy makers to accommodate the changing information about costs and demand of producers and consumers.
D)the unmanageable size of the economies that makes planning too difficult.

Question

Quizplus · Accepted Answer

Centrally planned economies fail to attain Pareto optimality because policy makers cannot efficiently accommodate the changing information about costs and demand of producers and consumers. This results in inefficiencies such as shortages, surpluses or inappropriate allocation of resources. The other options may be contributing factors but are not the primary reasons for the failure of centrally planned economies to attain Pareto optimality.

According to Critics,centrally Planned Economies Fail to Attain Pareto Optimality