Which of the following is primarily concerned with fulfilling wants and needs?

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Enhance your preparation for the IGCSE Business Studies Test with flashcards and multiple choice questions. Every query is paired with tailored hints and explanations to boost your confidence. Prepare thoroughly for your exam!

The primary concern of a market economy is to fulfill the wants and needs of consumers through the mechanisms of supply and demand. In a market economy, individuals and businesses make decisions about production and consumption based on their preferences and resource availability. This system allows for a variety of goods and services to be provided, catering to the diverse desires and requirements of consumers.

When consumers express their preferences through purchases, businesses respond by supplying goods and services that align with those preferences, thereby driving innovation and competition. This responsiveness to consumer demand is a fundamental characteristic of a market economy, as it operates under the assumption that the best way to allocate resources effectively is to meet the desires of consumers.

Other options, while related to economic activities, do not primarily focus on the direct fulfillment of wants and needs. Government policies may influence markets but are concerned more with regulation and stability. Supply chain management focuses on the logistics and flow of goods rather than directly addressing consumer wants. Resource allocation pertains to how resources are distributed across the economy, which supports market mechanisms but does not solely center on fulfilling individual needs and wants.

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