Question

quiz
question 6 of 10
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

Explanation:

A market economy is one where prices are determined by the interaction of supply and demand (the law of supply and demand). The first option describes a command economy (government - set prices). The second option is incorrect as businesses in a market economy set prices based on supply - demand and competition, not just what they want to earn. The fourth option is a misinterpretation of a market economy (it's not about the location of purchase). So the correct option is the one related to the law of supply and demand setting prices.

Answer:

C. When the law of supply demand sets prices of goods and services (assuming the options are labeled A, B, C, D with A being "When government agencies set prices of goods and services", B being "When businesses set prices based on what they want to earn", C being "When the law of supply demand sets prices of goods and services", D being "When consumers only buy goods and services in a market not a mall")