Which of the following is critical to the success of a marke

Solution

A market system is characterised as the one where all economic decisions are left to be made on the basis of market i.e Demand and supply. Market needs not be corrected by any external force, it takes care of itself.

Now this is possible only when property rights are clearly well defined. This is because for individuals to transact in market, it should be very clear who possesses what, only then exchange is possible.

So option A ( to allow individuals or firms to have exclusive use of their property) is the corrrect answer in order for markets to work.

Option B ( to prevent individuals from buying or selling their property depending on the circumstances) is incorrect because such a restriction will restrict market\'s ability to exchange and will lead to market failure and inefficiency.

Option C ( Both (a) and (b) are critical to the success of a market system.) is incorrect because both can not hold at the same time.

Option D (to allow the government to determine the optimal use of private property.) is not correct because government intervention (in any form) is ruled out in market systems.