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Markets Will Always Allocate Resources Efficiently.
The free market has the only mechanism by which to determine what efficient allocation of resources even means. A market economy can be defined as an economy in which the allocation of resources is determined only by their supply and the demand for them. Allocational Efficiency Definition Consumers will pay higher prices for goods and services that they value. . Market encourages people to create value True. The invisible hand guarantees good market results. A It ensures that resources will be allocated efficiently. It results in lower rewards being paid to factors of production when demand for the output they produce. The term of market failure is refers to a situation of the allocation of goods and services by a free market is not efficient. The equilibrium of supply and demand in a market minimizes the total benefits to buyers and sellers of participating in that market. How Markets Allocate Resources M...
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