Which of the following characteristics best describe a command system, as opposed to a competitive market?

• A. Prices determined by supply and demand
• B. Centralized decision-making by the government
• C. Competition among many buyers and sellers
• D. Private ownership of resources

Answer: (B)

Verified step by step guidance

1. Understand the definition of a command system: it is an economic system where the government or a central authority makes most of the economic decisions, including what to produce, how to produce, and for whom to produce.
2. Recognize that in a command system, prices are typically not determined by supply and demand but are set by the government or central planners.
3. Note that competition among many buyers and sellers is a feature of competitive markets, not command systems, where competition is usually limited or absent.
4. Identify that private ownership of resources is characteristic of market economies, whereas in command systems, resources are often owned and controlled by the state.
5. Conclude that the key characteristic distinguishing a command system from a competitive market is centralized decision-making by the government.