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This is because governments will always want to intervene in a market, by imposing taxes for purposes of raising revenue and protecting their markets (Clarke, 2009).
There is also another form of a market system referred to as the mixed market economy. A mixed economy has some elements whereby the forces of demand and supply play a role in regulating the prices of commodities, at the same time; the government has some interference with the affairs of the market (Clarke, 2009). This is through taxes and subsidies. In as much as the mixed economy was developed to solve the problems of a free market economy, it is important to denote that a free market economy is still a good form of market structure as compared to a mixed economy. The reason as to why a free market economy is better than a mixed economy is based on the fact that the market is very competitive.
Companies, in their bid to attract customers and make sales, will resort to the production of high quality products and services. These companies are concerned with satisfaction of the various needs of their customers, and on this basis, the opinions of customers will be used to produce services and products for purposes of satisfying the needs of customers (Romero, 2003). On the other hand, companies operating in a mixed economy cannot effectively achieve efficiency in providing services and products without increasing their costs. This is because their prices and financial activities are regulated by the various taxes that governments charge.
The costs of improving these services will in turn pass over to the customers of the organization. On the other hand, companies in a free market economy would not need to increase their prices, for purposes of adding value to their products. This is because they know that other companies will take advantage of these increases in price, and take over some of their customers (Romero, 2003). It is also cheaper to
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Infact most economies are mixed, with different levels of government intervention (Alan, 2012). Mixed economies are composed of private businesses that operate a large share of the market. The government comes in given areas of economy, for instance public spending and price regulation.
The essay gives detailed information about advantages and disadvantages of free market economy and mixed economy systems, through the use of the real-world examples. A mixed economy permits parallel operation of private and public entities. In nations that have a free market system, financial freedom promotes high living standards and high wages.
This essay primarily focuses on the identification of the distinctive features of two most common economic system in the world. Free market is an economic system that is determined by the price mechanism. A mixed economy is a combination of a free market and planned economies. Free market economy is deemed more effective compared to a mixed type.
The main focus of the essay is on the increased effectiveness of the free market system, compared with mixed type of economy. Among all the types of the economic system, free market economy is proved historically to be the most productive and efficient. In free market economy the government has no hand in the market.
These two parties decide what to produce and what to purchase. A free market economy is based on the forces of demand and supply with little or minimum government intervention in the form of subsidies, taxes and regulation (Kates, 2011:34). The means of labour are privately owned and this enables parties to according to their own self-interests.
The free market economy is characterised by private ownership of property and/or resources, means of production, consumer sovereignty, competition and independent choices. The free market economy is more effective than the mixed economy due to the fact that investors or businesses and the consumers have control over the market, i.e.
Unfortunately, the two primary objectives were arguably, inversely connected to each other. The partition and what followed would disappoint all the parties involved. Ghandi would come to realize the unity he wanted and believed in could crumble
The fair trade mark is being frequently used by organisations in order to provide a guarantee about their products to the customers. The fair trade market is said to be growing in the present times. However, there are various controversies relating to fair trade market. The
In the developed world, there are arguments both for and against certain economic systems.
In United States, the two competing economic systems are the free markets systems and the mixed markets economy. The free markets economy is an economic system
To begin with, a free market economic system is one that answers all economic questions regarding what to produce, how to produce these items and when to produce them. It allows the forces of demand and supply to interact freely to determine a region’s economic
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