Economics Questions and Answers

Start Your Free Trial

What are the advantages of a free market?

Expert Answers info

Jessica Pope eNotes educator | Certified Educator

calendarEducator since 2011

write590 answers

starTop subjects are Literature, Social Sciences, and History

The advantages of a free market are: consumer choice, limited bureaucracy, increased risk-taking, and innovation.

The free market increases consumer choice by allowing more parties to participate in the market economy. Individuals and companies are free to produce goods or offer services without having to seek the approval of government agencies. People can choose the degree to which they wish to participate in the market. Market production choices range from small, individual crafts-selling to large-scale corporate enterprises.

The second advantage of a free market is limited bureaucracy. Limited bureaucracy can translate to fewer wasted resources and more streamlined processes.

Finally, a free market can help create an environment that encourages greater risk and innovation. Proponents of a free market economy argue that risk-taking and innovation can be thwarted by bureaucratic meddling or too much government interference.

check Approved by eNotes Editorial

mytzell711 | Student

Free market has lots of advantages. Some of which are lower prices, higher quality of goods and services, more choices to choose from and economic freedom. Activities in free market are dependent on competition that dictates the law of demand and supply. The limited or no restriction, interference or subsidy by the government promotes more competition which will result in absolute benefit of the consumers. The extent to which the individual participate is on his own free will and assessment of the market activities. Entrepreneur's ultimate goal is to make profit while consumer's ultimate goal is to get the best of the services or best commodity that lead to more innovative ideas.