How does the task of production planning happen in a laissez-faire economy?
Under laissez-faire it is the price system that apportions labor, fuel, and other inputs among different industries in accord with those industries' requirements. In a free market, inputs are assigned to the firms that can make the most productive (most profitable) use of them. Firms that cannot make a sufficiently productive use of some input will be priced out of the market for that item.
You might also like to view...
Price floors and price ceilings
a. lead to the same prices and quantities that would be found in a competitive market b. lead to technical efficiency c. cause the demand curve to shift to the left d. usually result from government intervention e. cause the supply curve to shift to the right
The Great Depression ended in the United States when
a. the New Deal reforms were initiated by President Roosevelt. b. deficit spending ended in 1937. c. the United States returned to the gold standard in 1940. d. the United States began to mobilize for war in the early 1940s. e. the German economy suffered hyperinflation in the 1920s.