Question

How does a free enterprise economic system determine the distribution of goods and services in the market

place?
A. It relies on centralized control of distribution.
B. Distribution is driven by consumption.
C. Goods and services are equally distributed throughout society.
D. Demand has no impact on distribution.

Answer 1

The distribution is driven by consumption in a free enterprise economic system.

Step-by-step explanation:

A is not correct because such distribution is typical for a command economy.

B is correct because in this economic system where there is perfect competition, the consumers are the ones that determine the production and distribution of goods and services on the market.

C is not correct because the goods and services are distributed where they are in demand, thus there are differences from one place to another.

D is not correct because the demand is the most important factor that determines the production and distribution.