Economics · Oct / Nov 2020 · Paper 13 · Question 5
What is a disadvantage of a market economic system?
- AEntrepreneurs lack incentives to produce what consumers want.
- BGovernment intervention will reduce the efficiency of firms.
- CMarket dominance by firms can lead to higher prices.
- DThere is underproduction of demerit goods.
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Correct answer: C. Market dominance by firms can lead to higher prices.
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