1. Advantages
 Free market responds quickly to the people’s wants: Thus, firms will produce what
people want because it is more profitable whereas anything which is not demanded will
be taken out of production.
 Wide Variety of goods and services: There will be wide variety of goods and services
available in the market to suit everybody’s taste.
 Efficient use of resources encouraged: Profit being the sole motive, will drive the firms
to produce goods and services at lower cost and more efficiently. This will lead to firms
using latest technology to produce at lower costs.
 Benefit of individuals: Under a free market, individuals are free to deploy their talents
and invest their resources in whatever occupation or enterprise they choose, rather than
be subject to the direction of a government planner or other central authority. Further, the
market system allows individuals to succeed as much as their initiative, talents and drive
permit.
 Price competition provides lower priced goods.
 Competition demands efficient usage of raw materials.
 Competition demands improvements.
 Advocates of a free market economy emphasize that such a system maximizes individual
liberty.
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