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allocation of resources
(redirected from Resource allocation mechanism)

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allocation of resources

In economics, the way in which scarce resources are used in one way rather than another in the production and distribution of goods and services. When resources are allocated, there is an opportunity cost involved (they cannot be used for other purposes). In a market economy, it is mainly private firms that allocate resources in response to market forces. In a command economy, the state allocates resources via the planning mechanism.



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