Which of the following is typically found in a market economy?

• A. No competition among firms
• B. Centralized government planning of production
• C. Fixed prices set by the government
• D. Private ownership of resources

Answer: (D)

Verified step by step guidance

1. Understand the definition of a market economy: it is an economic system where decisions about production, investment, and distribution are guided by the price signals created by supply and demand.
2. Recognize that in a market economy, resources are typically owned privately rather than by the government, allowing individuals and firms to make their own economic decisions.
3. Identify that competition among firms is a key feature of a market economy, as it drives efficiency and innovation.
4. Note that centralized government planning and fixed prices set by the government are characteristics of command or planned economies, not market economies.
5. Conclude that private ownership of resources aligns with the fundamental principles of a market economy, distinguishing it from other economic systems.