What are the disadvantages of a free market economy?

Answer 1

DISADVANTAGES

1. No provision of merit goods like education, health, housing... so the poor will be deprived of the merit goods. In this way the rich becomes richer and the poor becomes poorer.
2. No provision of public goods (bus stop, garden, street lighting, army, police, fire services) important requirements for public goods not provided since it is not profitable to produce as consumers are not directly willing to pay for them.
3. Over consumption of demerit goods (drugs, cigarettes, alcohol) if consumers have a preference for these goods, then they will be provided given that they are profitable to produce.
4. Social cost ignored e.g. private firms ignore negative external factors (air, water and noise pollution, road conditions etc;)
5. Wastage of resources
6. Social injustice
7. Economic instability

Answer 2

The motivation of a business is to make a profit. Therefore, businesses usually act with their own profits in mind. Sometimes the best interests of business are NOT the best interests of common people, however. For example, car companies might deliberately make tires that go bad after a few years, so consumers will be forced to buy more tires (and boost the company's profits). Another good example is health care. In America, health care is run by corporations, which means they might only sell medicines that are profitable to make and sell.

Answer 3

the problem with a complete free market economy is monopolizes. with no regulation one company can have a monopole and charge whatever they want.people can buy and sell what they want because a market econmy means a free econmy.

Answer 4

There are many, but the most general include rampant materialism, high levels of economic inequality, private distribution of property rights, and apparent incompatibility of markets with democracy.

Answer 5

One disadvantage of a free market economy is that the wealth isnÕt distributed through all groups. Another disadvantage is that profits are not guaranteed.

Answer 6

Explain the disadvantages of a Free market economy

Answer 7

they are subjected directly to the country they related to

Answer 8

wealth is spread unevenly throughout society

Answer 9

economics is a science