What is an example of a market economy?
When government agencies set prices of goods and services
When businesses set prices based on what they want to earn
When the law of supply demand sets prices of goods and services
When consumers only buy goods and services in a market not a mall
What is an example of a market economy?
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An example of a market economy is: When the law of supply and demand sets prices of goods and services.
In a market economy, prices are determined by the relationship between supply (how much of a good or service is available) and demand (how much consumers want it). This system allows for flexibility and reflects consumers’ preferences, leading to efficient resource allocation. It differs from a planned economy where the government controls prices.