What kind of economy uses a free enterprise system?
a closed economy
a command economy
a market economy
a traditional economy


Its is C; a market economy

The third answer is correct (C).

A market economy is characterized by the free entry and exit of competing firms and the free mobility of factors of production. This model aggregates a large number of companies and is governed by free competition and the Law of Supply and Demand.

The Law of Supply and Demand determines the price of products. If demand is high, price and output increase. If demand decreases, price decreases and quantity produced as well, because producers lose the incentive to produce.

In this way, the companies are not able to determine the prices, being determinant for its permanence the efficiency in the mode of production. Companies with high production costs succumb to competition and are eliminated from the market.

its C on edge


just took the unit test

A market economy


A closed company does not function anymore, a command economy has fixed sets, and a traditional economy is with the government.

market economy


they have to focus on certain groups

Market economy


Do you know the answer?

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