Multiple choice

Which among the following is not a trait of free market?

  1. Government control is minimal

  2. Prices are decided by market forces

  3. Always works in equilibrium

  4. Shortages and surpluses are rare
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Free markets are characterized by minimal government intervention and prices determined by supply and demand. However, markets rarely achieve perfect equilibrium - they experience constant fluctuations, shortages, and surpluses as they adjust to changing conditions. The statement that they "always work in equilibrium" is incorrect.

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