Which of the Following Is True About a Free Market

question 4

Multiple Choice

Which of the following is true about a free market?

• A)A true free market would deal with market imperfections.
• B)The current situation of six major banks that are "too big to fail" is an example of destructive competition.
• C)In economic systems,it is unlikely for natural monopolies to occur.
• D)The free market in actual terms consists of commerce legally constrained by what is economically desirable and by what is socially desirable as well.
• E)A true free market is a market free from any regulation.

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Definitions:

Barriers

Obstacles or impediments that prevent or hinder progress, such as trade barriers which can restrict the flow of goods between countries.

Control Over Price

The ability of a company or market to influence or set the price of goods and services.

Product Differentiation

The process of distinguishing a product or service from others, to make it more attractive to a particular target market.

Total Market

The entirety of the demand and supply for a particular good or service across all its potential markets.