In a market system, decisions about how to allocate resources are made:
A)by central planning boards in each industry.
B)by a lottery system.
C)by individuals and firms interacting in markets coordinated by market prices.
D)by large conglomerates working cooperatively with the government.

Question

In a market system, decisions about how to allocate resources are made:
A)​by central planning boards in each industry.
B)​by a lottery system.
C)​by individuals and firms interacting in markets coordinated by market prices.
D)​by large conglomerates working cooperatively with the government.

Quizplus · Accepted Answer

In a market system, individuals and firms interact in markets where prices are determined by supply and demand. Through this process, resources are allocated according to consumers' preferences and producers' ability to meet those preferences. It is a decentralized system without a central planning authority, allowing for maximum freedom and efficiency in decision-making.

In a Market System, Decisions About How to Allocate Resources