How does a pure market economy answer the basic question of which goods and services should be produced?(1 point)

Question

Responses

The law of supply and demand drives this choice.
The law of supply and demand drives this choice.

Producers decide what should be produced.
Producers decide what should be produced.

Consumers decide what should be produced.
Consumers decide what should be produced.

The government decides what should be produced.

Answer 1

In a pure market economy, the basic question of which goods and services should be produced is answered by:

The law of supply and demand drives this choice.

This means that consumer preferences and the willingness of producers to supply products determine what is produced in the economy.