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Economics · May / June 2021 · Paper 12 · Question 1

2281Types of markets

What is an advantage of competitive markets?

  1. ACompetition causes inequalities of wealth.
  2. BCompetition encourages the efficient use of resources.
  3. CThe economic problem of scarcity is eliminated.
  4. DThe right quantity of merit goods is guaranteed.

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Correct answer: B. Competition encourages the efficient use of resources.

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