Question

Consumers and producers make their choices based on the market forces of demand and supply in _______.

• A. socialist (Command) economy
• B. mixed economy
• C. capitalist economy
• D. closed economy

Answer 1

Answer: (C)

capitalist economy

Consumers and producers make their choices based on the market forces of demand and supply in Capitalist economy. Capitalist economy is also called the market economy in which the prices are determined by the free interaction of the forces of demand and supply. It is an automatic self-regulating mechanism which runs with the motive of profit.