Free Markets in America Allow All of the Following:
In a free market system, the owners of private companies and business control the factors of production. Because of this, they must ask themselves these three questions: What to produce? How to produce it? Who consumes that which is produced? Economic Freedom The exchange within this type of system is described as a voluntary agreement between two people or between groups of people. These two individuals exchange two economic goods, either tangible commodities or nontangible services. -Markets allow us to exchange the things we have for the things we want. -You can make anything you want and sell whatever you like. -Wide variety of goods and services: There will be wide variety of goods and services available in the market to suit everybody’s taste. -The role of the state is limited to ensuring proper transparency in the prices charged by the sellers of the concerned commodity. Economic Efficiency -It is much easier to learn and prefect one task then to learn them all. -Specialization leads to efficient us of resources including capital, land, and labor. -A quick response to rapidly changing conditions when necessary such as drops in market prices which lowers the chance of bankruptcy. -Profit motives drives the firms to produce goods and services at lower cost and more efficiently. -Public Disclosure Laws increase efficiency in the American Economy by informing the consumers of what is in the goods they are purchasing. -This decreases the possibilities of getting law suits for falsifying information to the customers. Economic Growth -The ability to change the prices of objects due to supply and demand allows the consumers to purchase goods at a more affordable price. Better prices lead to a better flow of money producing growth within the revenue and profit. -Encourages innovation leading to profitable opportunity and new ideas. -Competition regulates the marketplace by allowing companies to reach new heights to be able to keep their customers happy. -Causes more production with reasonable prices -You will never be behind in technology or the latest deals because of the incentive of your desires -This will lead to firms using latest technology to produce at lower costs Self-Regulation -The competition between each business and self-interest keep the marketplace functioning. -Self-Interest is the personal gain from a transaction. This is motivation for the seller to keep producing goods. -Incentives are reasons why consumers buy many of their goods. Incentives often lower the opportunity cost for the buyers. -For example: lower prices and discounts With no central plan or direction, the Invisible Hand leads the economy to grow economically, have an efficient economy, and allow economic freedom. |
Free markets are effective and consumer friendly .
Free markets have increased productivity in the economy.
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CONSUMERS ARE FREE TO CHOOSE