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Brianna Valdez
on Nov 25, 2024

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In a market system, as one industry expands while another contracts, resources will flow

A) away from the expanding industry toward the contracting one.
B) across industries, driven by the changes in resource prices paid by firms.
C) toward the industry where the product demand is declining.
D) because resource allocation will have to equalize between the two industries.

Market System

In this economic structure, supply and demand forces directly influence decisions around investment, production capacity, and distribution methods, with the price points of goods and services being freely determined in a competitive price system.

Expanding Industry

An industry or sector experiencing significant growth in terms of output, sales, or number of participants.

Resource Prices

The costs associated with acquiring raw materials or inputs used in the production of goods and services.

  • Appreciate how the interplay of supply and demand determines resource distribution and the size of various industries.
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Sharon SyafirudinDec 02, 2024
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