Question

A group of businesspeople open a factory in their hometown to produce car parts. The business owners decide which parts and how many to produce based on customer orders. Under which type of economic system does this business most likely exist?

Answer 1

Answer:

Market Economy

Explanation:

In the market economy, the production type and output will be determined by the power of supply and demand. The government has little to no influence within the economy. All the decisions about what the company should do will fall to the hands of the business owners.

Every economic system have their own positive and negative sides.

In a market economy, people has the freedom to do whatever career they wish to choose. They are also allowed to collect private properties and accumulate personal wealth. On the downside, unregulated market economy could lead to dangerous business practices and income disparity.