The Advantages And Disadvantages Of Free Market Economy, price Determination With
Market Forces. And Government Intervention With Free Market Equilibrium Price and the
More suitable model for the Sudan
Advantageous of free market economy
1. market economies can adjust to change easily( If there is a demand for one thing,
companies have the ability to change what they produce instead of having to go through
too much government protocol first)
2. Rational self interest in market economies are also encouraged (allow freedom for
people to do what they want, make what they want, and, sell what they want -to a certain
extent-, this can also be described as being able to decide what is going to be produced ,
how it is going to be produced and for whom it is going to be produced). the government
tries to stay out of the way of businesses- Although the government sets certain standards
businesses must follow- for the most part businesses can do as they please.
3. there is a great variety of goods and services for consumers ( If there is a demand for a
good or service, the demand will almost always be met in a market economy).
4. market economy encourage competitive environment, ( competition does encourage
innovation, and the free market economy has produced well over a century of dizzying
technical progress. At the same time productivity has also increased at a phenomenal rate.
competition is one of the basic reasons why there are generally so many different varieties
of goods for consumers to choose from .
On the production side of the market, firms making goods which is more popular with
consumers can sell them at competitive prices and earn profits. But producers who make
unwanted products, or operate inefficiently and pay too much to make their products, will
incur losses, eventually, they must either learn to produce and compete efficiently -making
products consumers want at competitive prices- or they will go out of business, and
someone else will take over their factories, machines, and other resources. thats how
economic incentives work in a market economy.
5. The norm in the market economy is that the wages is affected by the amount of work.
The harder a person works, the more you would expect to get paid, since people are paid
by the amount they work : a lot of work results in a high outcome for economy as whole,
and a high income for the person.
