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

In a free enterprise economic system, distribution is driven by consumption.

Step-by-step explanation:

A is not correct because a centralized control of distribution is not a characteristic of such an economic system.

B is correct because the consumers are the ones that determine what and how much is produced, and based on the amount of consumption they determine the distribution of goods and services.

C is not correct because the distribution of goods and services is not equal, but it is more concentrated where there is more demand and less concentrated where there is less demand.

D is not correct because in this economic system the demand is exactly one determines the distribution of goods and services.