A free market exists O A. when the government places significant restrictions on

Question

A free market exists O A. when the government places significant restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed OB. when the government places few restrictions on how a good or a service can be produced or sold or on how a factorofprod ction can be employed. C. only in fiction. There are no markets or economies which even come close to approaching the status of a free market D. when the government places absolutely no restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed

Explanation / Answer

Correct option is (D).

A free market is said to exist when there is no government intervention of any form, either in goods market (in terms of price or quantity) or in factor market (in terms of wage rate of employment).

Note that option (C) is a subjective statement, which is a normative statement, so it is not correct.

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