Which of the following statements is true about risk management in market systems versus command systems?
A. Market systems manage risk better because entrepreneurs taking risks bear the costs of
poor decisions, where in command systems government decision makers don't bear those
costs.
B. Neither system is better than the other in terms of risk management; both systems are
equally susceptible to natural disasters and changes in consumer preferences.
C. Command systems manage risk better because the government controls most economic
activity and can therefore eliminate risk.
D. Market systems face risk because of the possibility of profits and losses; command
systems don't face risk because they are not profit driven.
Answer: A
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