What role does the law of supply and demand play in a command economy? A. The law of supply and demand does not apply because, in a command economy, the government controls the market.
B. The law of supply and demand functions in reverse because a command economy is the opposite of a market economy.
C. The law of supply and demand functions the same way as in other economies, but the government sets the prices.
D. The law of supply and demand applies to a command economy as much as it does to other economies.
What role does the law of supply and demand play in a command economy?
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The correct answer is A. The law of supply and demand does not apply because, in a command economy, the government controls the market.
In a command economy, the government makes all decisions regarding the production and distribution of goods and services. This means that prices are set by the government rather than by the forces of supply and demand, which are more characteristic of market economies. Therefore, the traditional law of supply and demand does not function in the same way in a command economy.