In a free market economy, resources are allocated through the
Answer Details
In a free market economy, resources are allocated through the price mechanism. This means that the prices of goods and services, and the demand for those goods and services, determine how resources are used and distributed. For example, if there is a high demand for a certain product, the price for that product will increase and producers will allocate more resources to producing that product. Conversely, if demand for a product decreases, the price will decrease and producers will allocate fewer resources to producing it. The price mechanism helps to ensure that resources are allocated in the most efficient and effective way possible, based on the wants and needs of consumers.