Free Market Economy

673 Words3 Pages
Free market Economy The term free market economy primarily means a system where the buyers and sellers are responsible for the choices they make. Free market gives the absolute power to prices to determine the of goods and services. These prices, in return, are set by the forces of supply and demand of a respective product. In cases of demand falling short of the supply of a respective product. Free market economy is also characterized by free trade without any tariffs or subsidies imposed by the government. The most fundamental concept of a free economic system is personal freedom. A free economic system assumes that people will benefit from the actions they feel most compelled to take. Working from this central idea, a free economic system allows people to form cooperative relationships that benefit both sides so people are not forced to do anything they do not wish to do. A free market also ensures that people can run their business in whatever way they see fit, without being disadvantaged by outside forces. This type of relationship is called freedom of contract. A free economic system compels entrepreneurs to provide the wishes of the consumer by consistently seeking to offer not only better products but also new products that fulfill consumers' needs. However, a free economic system does more than satisfy the needs of the majority; it also allows for groups with special interests or needs to have their needs met much better than they could in an economy with strong central planning. In the end, the free economic system can fulfill almost everyone's needs and wants, while ensuring profit for everyone. A free economic system discourages judgment based on race, creed, color or political affiliation. A company that refused to sell its products to certain types of people or refused to hire or do business with certain groups would face higher costs than

More about Free Market Economy

Open Document