Describe three major virtues of a market system.

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A free market system has both advantages and disadvantages. As you consider the virtues of a market economy, it is also necessary to look at how real world contexts limits these virtues.

In theory, free markets allow buyers and sellers the greatest amount of choice. This theory argues that quality will improve and prices decrease as a result. Buyers can seek out the best quality at the lowest prices. If someone can make a better or cheaper product they are free to do so. In the real world, though, very large companies can sell products below cost to bankrupt their competition and then raise prices again. An example of this was airline deregulation, which originally was intended to lower prices, but has led to the current situation of high prices, de facto monopolies, and worse service. 

Next, a pure free market allows the maximum degree of freedom for consumers and producers of goods. On the positive side, this encourages innovation. On the negative side, this means,...

(The entire section contains 2 answers and 497 words.)

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