28 Views

Question : In a free-market economy the allocation of resources is determined by

Option 1: voting is done by consumers

Option 2: a central planning authority

Option 3: consumer preferences

Option 4: the level of profits of firms


Team Careers360 6th Jan, 2024
Answer (1)
Team Careers360 18th Jan, 2024

Correct Answer: consumer preferences


Solution : The correct answer is (c) consumer preferences.

In a free-market economy, resources are allocated through the interaction of supply and demand. The demand for a good or service is determined by the number of people who want to buy it, and the supply is determined by the number of people who are willing to sell it. The price of a good or service is determined by the intersection of supply and demand. Consumer preferences play a key role in determining the allocation of resources in a free-market economy. When consumers demand more of a good or service, the price of that good or service will rise. This will signal to producers that they should produce more of that good or service, as there is a profit to be made.

Related Questions

Chandigarh University Admissi...
Apply
Ranked #1 Among all Private Indian Universities in QS Asia Rankings 2025 | Scholarships worth 210 CR
TAPMI MBA 2025 | Technology M...
Apply
MBA Admission Open in Technology Management and AI & Data Science | NAAC A++ | Institution of Eminence | Assured Scholarships
Sanskriti University LLM Admi...
Apply
Best innovation and research-driven university of Uttar Pradesh
Maya Devi University LLM admi...
Apply
43.6 LPA Highest Package | 5.48 LPA Average Package | 150+ Courses in UG, PG, Ph.D
Amity University, Noida Law A...
Apply
700+ Campus placements at top national and global law firms, corporates, and judiciaries
Amity University Noida MBA Ad...
Apply
Amongst top 3% universities globally (QS Rankings)
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books