ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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modified free market economy
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command economy
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traditional economy
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None of the above
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Detailed explanation-1: -Healthy market competition is fundamental to a well-functioning U.S. economy. Basic economic theory demonstrates that when firms have to compete for customers, it leads to lower prices, higher quality goods and services, greater variety, and more innovation.
Detailed explanation-2: -A free market economy is one where supply and demand regulate production and labor as opposed to government intervention. Most countries’ economies contain elements of both free market and command economies.
Detailed explanation-3: -The regulatory role of the government involves formulating and implementing various direct and indirect measures to monitor and regulate the economic activities of the private sector.
Detailed explanation-4: -Government intervention such as taxes and subsidies may be effective in solving market failures, while other solutions may emerge within the private market or through collective actions.