Which of the Following Statements Does NOT Describe a Command

question 202

Multiple Choice

Which of the following statements does NOT describe a command economy?

• A)Government bureaucrats decide what and how much is to be produced.
• B)A command economy is sometimes called a "planned economy."
• C)Prices are set by the law of supply and demand.
• D)Producers offer a highly limited assortment of goods and services.
• E)This type of economy is found in countries like Iran and North Korea.

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Definitions:

Long-run Supply Curve

A graphical representation showing the relationship between price and quantity supplied over a longer period, when all inputs can be varied.

Perfectly Elastic

Describes a situation in which the quantity demanded or supplied changes by an infinite amount in response to any price change, depicted as a horizontal line on a graph.

Long-run Equilibrium

A state in which all factors of production are variable, leading to a situation where firms only earn normal profits and no incentives exist for entering or exiting the industry.

Short-run Equilibrium

The condition in which the quantity supplied equals the quantity demanded at a particular price level, but only over a short period.