In a socialist economy, prices of commodities are determined by

Step 1: Analyze the question The question asks who or what determines prices in a socialist economy. This is about economic systems.

Step 2: Explain the concept Economic systems differ in how they answer the basic questions of what to produce, how to produce, and for whom to produce:

• Capitalist (free market) economy: Prices are set by the forces of demand and supply, which is the price mechanism. Consumers are described as "sovereign."
• Socialist (command or centrally planned) economy: The state owns the major means of production. A central planning authority decides what is produced, in what quantity, and at what price.
• Mixed economy: This combines both. Nigeria is an example.

Step 3: Evaluate each option

• A. Forces of demand and supply: This describes a capitalist or free market economy, so it is wrong.
• B. Producers of the commodities: Private producers setting prices is typical of monopolies or capitalist systems, so it is wrong.
• C. The central planning authority: In a socialist economy the government planning body fixes prices, so it is correct.
• D. Consumers who are sovereign: Consumer sovereignty is a feature of capitalism, so it is wrong.

Step 4: Answer The correct option is C. the central planning authority.

Tip: Link each system to its keyword:

• Capitalism → price mechanism, consumer sovereignty, private ownership
• Socialism → central planning, state ownership, government-fixed prices

If a question says "socialist," "command," or "centrally planned," think government planners.