What are the disadvantages of a free economy? How might they be overcome? Would the measures that have been suggested result in a better system than an entirely free market?

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What are the disadvantages of a free economy? How might they be overcome? Would the measures that have been suggested result in a better system than an entirely free market?

In a free market economy, decisions about resource allocation are made without any central direction but, instead, as a result of innumerable independent decisions taken by individual producers and consumers. A free market economy is one at which where the price is allowed to fluctuate. Price is fluctuated in accordance to demand and supply to get equilibrium. Freedom to move resources around.

The price of products is constantly changing due to demand by the consumers and also the supply of goods. Prices go up if consumers are buying a lot of a particular product and prices go down if consumers are not buying a particular product. This is called the price mechanism. A free market is dynamic, the government does not control prices, and there is no government interference. Demand and supply affect the price of products. The consumer is in control of the market.

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This type of economy has been the most successful market, compared with the planned economy, which collapsed in places like Russia. The free market is sometimes known as a capitalist economy and the planned economy is known as a communist economy.

Despite the free market economy being very successful, there are some major problems. For example, the issue of unemployment is a major problem. If a person was to lose their job, they would have to find another job, probably in a different industry, so they would have to get training, which would take a lot of time. ...

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