The decisions of firms and households are guided by prices and self-interest in a
A)command economy.
B)centrally-planned economy.
C)market economy.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

In a market economy, firms and households are guided by prices and self-interest as they interact with each other in the marketplace. In a command economy, the government makes all the decisions, while in a centrally-planned economy, a central authority plans and directs economic activities. Therefore, Option C is the correct choice.

The Decisions of Firms and Households Are Guided by Prices