The allocation of goods and services in a free market economy is performed by
Answer Details
In a free market economy, the allocation of goods and services is performed by the price system. The price system is a mechanism by which prices are determined through the interaction of buyers and sellers in the market. Prices serve as a signal for producers to supply goods and services, and for consumers to demand them. As demand for a product increases, its price increases, which signals to producers to increase their supply. Similarly, as demand for a product decreases, its price decreases, which signals to producers to decrease their supply. This mechanism ensures that goods and services are allocated efficiently based on consumer preferences and market demand, without the need for central planning or government intervention.