What Are The Advantage And Disadvantage Of Free Market?

7 Answers

Anonymous Profile
Anonymous answered
Advantages of free economy
1) The aim of the entrepreneurs is earning more and more profit which increases efficiency
2) Variety of goods/services are produces so consumers are free to choose what they want to buy
3) Neither shortage nor surplus of goods/services is faced so resources are not wasted
4) Competition faced by the businesses along with the forces of demand and supply determines the prices of products, keeping them low
5) New businesses are encouraged by the profits
Disadvantages of free economy
1) No government-provided services, eg health, education, etc are not there so only those who can afford to buy these services will benefit from them, thus the gap between the rich and the poor increases.
2) Non-profitable goods/services are not produced
3) Since the government has little control and planning, economic booms or recessions may be faced
4) Businesses may be encouraged to create monopolies. They may increase their prices which will limit the choice of the consumers
Anonymous Profile
Anonymous answered
The main advantage of free economy is that all good and service offered in an economy are in partial or perfect competition. This state of economy ultimately give assistance to the end consumer because of the price benefit enjoyed. However one major disadvantage is that due to free economy local inefficient industries collapse or the industry which is at infancy in some local market may not be able to survive due to intense competitive environment. This may hinder innovation and create unemployment.
thanked the writer.
Anonymous
Anonymous commented
"local inefficient industries collapse "

As far as I am concerned, inefficient industries SHOULD collapse. Darwinism operates within the business world as well.
Anonymous Profile
Anonymous answered
The advantages of free market system are:
- the free market responds quickly to people's wants.
- the Market produces a wide variety of goods and services to meet consumer's wants
- the market system encourages the use of new and better methods and machines to produce goods and services.

The disadvantages of free market are:
- the factors of production will be employed only if it is profitable to do so.
- the free market can fail to provide certain goods and services.
- the free market may encourage the consumption of harmful goods.
- the social effects of production may be ignored.
- the market system allocates more goods and services to those consumers who have more money than others.
SidrA Tasneem Profile
SidrA Tasneem answered
The advantage of free economy is that consumers can get benefits of enjoying international brands with low prices but the main disadvantage of free economy is to meet foreign competition in the market.
Tauseef Sheikh Profile
Tauseef Sheikh answered
The advantage is variety in goods and services
The disadvantage is, without parameter and income tax, the strong ones become stronger and form up monopolies.

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Free Market
Anonymous Profile
Anonymous answered
Advantage
1- prices will decrease
2- quality will increase
3- investment will increase by competition
4- customers will have the right of choices
disadvantage
1- government can not involve in market so some times vice avers the price will increase we know that government can control the prices by taxes but in some countries government is weak they so can not for instance you can see this situation in government of afghanistan. Now traders have union illegally and they can select price for goods as they want.
Poor will become poorer but rich will become richer it is right that we can not finnish the distance between rich and poor even in socialistic system. But we can make it less by using socialistic system so the problem is just that government can not involve to market.
2- market will just produce profitable goods and I'm merits goods so trader do not have care of society.
Glen Thornbury Profile
Glen Thornbury answered
OR the value of the lower is brought up a little, and the other value is dropped a lot!
So now the Value of the US dollar is dropping like a rock, and it takes far more dollars to do the same thing!
And the worlds economy is based on the US dollar to a very high level!
So now this chain reaction is spreading to the world, and the very poor countries will have to look else where for aid!
So this new approach will be felt by those VERY poor Starving People the MOST!
The lowest link on the chain WILL PAY THE MOST!
Logic101

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