Question

Misallocation of resources could take place in a free-enterprise economy due to which of the following?

• A. Incorrect anticipation of demand.
• B. Costs reflecting sacrifice of the producer only.
• C. Needs not being adequately reflected in demand.
• D. All of the above

Answer 1

The correct option is D All of the above

Misallocation of resources could take place in a free-enterprise economy due to which of the following:-a) Incorrect anticipation of demand.

b) Costs reflecting sacrifice of the producer only.

c) Needs not being adequately reflected in demand.

Allocation of resources in the market is often not done properly due to the above-mentioned factors and as a result, it does not lead to the maximization of profits and satisfaction.

Hence, option D is correcct.