GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Competition: In a free enterprise, buyers and sellers compete. Buyers attempt to acquire goods for lower prices or more favorable terms, while sellers attempt to sell goods for higher prices. Market equilibrium is met where these two parties agree to come together.
Detailed explanation-2: -Owners of capital resources try to get the highest possible prices from the rent or sale of their resources. This “invisible hand” of self-interest is the driving force of a market economy. Competition is another important characteristic of a market economy.
Detailed explanation-3: -As such, buyers and sellers compete with one another and among each other to pay the lowest price (for buyers) or receive the highest price (for sellers). This sort of competition and price discovery would exist in a free market economy for everything from products and services to labor markets.