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Essay On Free Market System

1503 Words7 Pages

A free market system, often called the capitalism market, is a market system which is owned and controlled by solely by private individuals. All the factors of production: land, labour, capital and enterprise, all belong in the hands of private individuals and there is no government interference with rules and restriction. People who own and control these factors have a distinct role in the economy. In the free market system, market prices are determined by free moving competition between private businesses, there are no barriers to enter or exit the market as all the factors of production lie in the hands of private individual. Nowadays, the free market economy has been involved in almost every country. They wither have a portion of the economy being free market or the hwol thing being free market. In the free market system as there is no government interference, there will be no government grants, loans, subsidies etc. The government wouldn’t have no control over firms from the forces of the market pressure, or even enforce policies of taxes, contracts between business, land ownership rights etc. In the free …show more content…

The persons who sells or provide the services or goods, will set the price of their goods. There will no planning committee set by a government to determine the price of a good or service. The price will be set by the person selling the good or service. In the free market system there is no monopoly. There is no one individual selling a product that no one sell can produce or sell. As there are no barriers to entry and exit, there will be no monopoly as there will be many businesses competing with each other for the best selling price and how much they are going to supply. These prices will determine the demand and supply of a good. The price is high the demand of the good will be less where as if the price if low the demand for the good or service will high as more people can afford the good and

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