Economics · Types of Economies
In a pure Capitalist Economy, what is the primary mechanism that ensures resources are directed toward the production of goods that consumers actually desire, often referred to as 'Consumer Sovereignty'?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Subsidies provided by the state to firms that produce essential commodities for the poor.
- 2The interaction of supply and demand in the market which determines the prevailing price of goods.✓
- 3The collective bargaining power of trade unions ensuring high wages for industrial workers.
- 4Direct instructions from the Ministry of Commerce to all registered manufacturing units.
Correct answer
The interaction of supply and demand in the market which determines the prevailing price of goods.
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