An economy in the hands of a small number of individuals or firms is described as?

An economy in the hands of a small number of individuals or firms is described as?

• A. Centralized economy
• B. Market economy
• C. Decentralized
• D. Economic order

Answer: (A)

Concentrating economic power in a few hands is the key idea. When a central authority or a small group decides what gets produced, how resources are allocated, and what prices or wages will be, decisions are centralized rather than left to a broad mix of buyers and sellers. That description fits a centralized economy best. A market economy relies on many participants making independent decisions guided by price signals, so it’s not centralized. Decentralized describes dispersed control, which is the opposite of central control, and “economic order” isn’t a standard term that specifies this situation.

Concentrating economic power in a few hands is the key idea. When a central authority or a small group decides what gets produced, how resources are allocated, and what prices or wages will be, decisions are centralized rather than left to a broad mix of buyers and sellers. That description fits a centralized economy best. A market economy relies on many participants making independent decisions guided by price signals, so it’s not centralized. Decentralized describes dispersed control, which is the opposite of central control, and “economic order” isn’t a standard term that specifies this situation.