Under this market system, supply and demand are influenced by the people without any government involvement.

Under this market system, supply and demand are influenced by the people without any government involvement.

• A. Command economy
• B. Mixed economy
• C. Free-market economics
• D. Socialist economy

Answer: (C)

In a free-market system, decisions about what to produce and at what price are driven by individuals and businesses with little or no government involvement. Prices emerge from voluntary exchanges and serve as signals that guide production and consumption. When demand for a good rises, prices go up, encouraging more supply; when demand falls, prices drop and production may slow. This contrasts with a command economy, where the government dictates what gets produced and at what price; a socialist economy, where the state often owns resources and plans production; or a mixed economy, which blends market decisions with some government intervention. The key idea is that voluntary actions by buyers and sellers coordinate economic activity without central planning.

In a free-market system, decisions about what to produce and at what price are driven by individuals and businesses with little or no government involvement. Prices emerge from voluntary exchanges and serve as signals that guide production and consumption. When demand for a good rises, prices go up, encouraging more supply; when demand falls, prices drop and production may slow. This contrasts with a command economy, where the government dictates what gets produced and at what price; a socialist economy, where the state often owns resources and plans production; or a mixed economy, which blends market decisions with some government intervention. The key idea is that voluntary actions by buyers and sellers coordinate economic activity without central planning.