Which of the Following Best Describes a Command Economy

question 176

Multiple Choice

Which of the following best describes a command economy?

• A) An economy that is characterized by a barter trade of goods and services
• B) An economy where strong controls are imposed by the ruling authority
• C) An economy in which resources are allocated through the price mechanism
• D) An economy in which there are a few privately owned firms

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Definitions:

Four-Firm Concentration Ratio

A metric that measures the total market share controlled by the four largest firms within an industry, used to assess the competitiveness of the market.

Herfindahl Index

A measure of market concentration, calculating the sum of the squares of market shares of each firm within an industry.

Short-Run Equilibrium

A state in which market supply equals demand, determining the price and quantity sold, specifically within a short timeframe.

Profit-Maximizing

This refers to the process businesses use to determine the output level at which profits are at their highest.