In a market economy,________ interact in markets to decide the answers to the fundamental economic questions.
A)state and local governments
B)large corporations
C)households and firms
D)the judicial and legislative branches of the federal government

Question

Quizplus · Accepted Answer

In a market economy, households and firms are the main actors who interact in markets to determine what goods and services are produced, how they are produced, and for whom they are produced. This system is based on the principles of supply and demand, where firms supply goods and services in response to the demand from households, who in turn provide the necessary income for firms to continue producing. While state and local governments, large corporations, and the judicial and legislative branches of the federal government can play a role in regulating the market, it is ultimately the interactions between households and firms that determine the functioning of the economy.

In a Market Economy,________ Interact in Markets to Decide the Answers