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In a Market economy, why do businesses and individuals make the decisions?

Question 5 options:

Because this type of economy is geared more towards what the people want and buy.


So that the government doesn't have a say


Because the government said they could

1 Answer

3 votes

In a market economy, businesses and individuals make decisions based on their own self-interest. This means that businesses make decisions about what to produce and how much to charge based on what they believe will maximize their profits. Similarly, individuals make decisions about what to buy and how much to spend based on their own preferences and budget constraints. The interaction between buyers and sellers in the market determines the prices of goods and services and the allocation of resources. The government’s role in a market economy is typically limited to enforcing property rights and contracts, providing public goods and services, and regulating certain industries to promote competition and protect consumers. So the correct answer would be “Because this type of economy is geared more towards what the people want and buy.”

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