A major disadvantage of a capitalist economy is that it

Step 1: Analyze the question The question asks for a major disadvantage of a capitalist economy, so we need the option that describes a weakness, not a strength.

Step 2: Recall the concept In a capitalist (free market) economy:

• Resources and the means of production are privately owned.
• The price mechanism decides what, how, and for whom to produce.
• The profit motive drives economic activity.
• Government interference is minimal.

Advantages: efficiency, competition, consumer sovereignty, innovation, high output. Disadvantages: income inequality, exploitation of workers, unemployment during downturns, monopolies, neglect of public goods (roads, defence), and wasteful advertising.

Step 3: Evaluate each option

• A. Leads to low production of goods and services. Wrong. The profit motive and competition usually lead to high production. This is a feature of a poorly run planned economy, not capitalism.
• B. Requires a large number of officials to operate. Wrong. This describes a socialist/command economy, where central planners and officials control production. Capitalism relies on the price mechanism instead.
• C. Considers individual consumers' satisfaction. Wrong. This is an advantage (consumer sovereignty), not a disadvantage.
• D. Worsens income inequality among the citizens. Correct. Because wealth and property are privately owned and rewards depend on ownership and market success, owners of capital grow richer while those with few assets or skills stay poor. This creates a wide gap between the rich and the poor.

Step 4: Answer The correct option is D.

Exam tip: For "disadvantage of capitalism," think "gap between rich and poor." For "disadvantage of socialism/planned economy," think "bureaucracy, lack of incentive, and shortages." Option B is a classic trap, because it describes a planned economy.