Which One of the Following Is a Criticism of Preferencing

question 42

Multiple Choice

Which one of the following is a criticism of preferencing?

• A) There is a potential economic cost that is undisclosed.
• B) Too many opportunities exist for the customer to benefit from price improvements.
• C) It adds nothing of value to the price discovery process.
• D) A preferencing broker plays too active a role in price setting.

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Definitions:

Mixed-Market Economy

An economic system that combines elements of both capitalism and socialism, featuring a combination of free market principles and government intervention.

Laissez-Faire Economy

An economic system where transactions between private parties are free from government intervention such as regulation, privileges, tariffs, and subsidies.

Laissez-Faire Capitalism

An economic system where private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies.

Market System

This system of economy relies on supply and demand to guide decisions about investments, production levels, and the distribution mechanism, with the cost of goods and services being determined in an unregulated pricing system.