Question

What role does the law of supply and demand play in a command economy? A. The law of supply and demand functions in reverse because a command economy is the opposite of a market economy. B. The law of supply and demand functions the same way as in other economies, but the government sets the prices. C. The law of supply and demand does not apply because in a command economy, the government controls the market. D. The law of supply and demand applies to a command economy as much as it does to other economies.

Answer 1

Answer:

C. The law of supply and demand does not apply because, in a command economy, the government controls the market.

Explanation:

The command economy is an economic system where the economic decision will be taken by the government as to what and how to produce goods. It will not depend on the law of supply and demand as the market economy does.