Select the correct answer.
What role does the law of supply and demand play in a command economy?
A. The law of supply and demand does not apply because in a command economy, the government controls the market.
B. The law of supply and demand applies to a command economy as much as it does to other economies.
C. The law of supply and demand functions the same way as in other economies, but the government sets the prices.
D. The law of supply and demand functions in reverse because a command economy is the opposite of a market economy.
Answer (1)
In a command economy, the law of supply and demand does not apply because the government controls the market. Prices and production levels are determined by central planning, leading to potential shortages or surpluses. Thus, economic principles operate differently compared to market economies. ;
