well in simple terms........ if you dont do it you will get a zero!!!!
Generally speaking, a company in a free market economy must set prices for its products that are "competitive" with other companies in the same line of business. If a company is inefficient in its operations, it won't be able to remain in the market of its competitors and may go bankrupt.
In a free market economy, there are no limits to a company's profitability. For the benefit of a company's employees, its shareholders, and for the payment of taxes to the government, the more a company profits, the more it helps the economy of a nation.
As its name would suggest, a Market Economy is composed of interrelated forces--such as consumers, manufacturers and retailers--that all play a role in generating, or reacting to, demand. That is, a Market Economy is primarily impacted by the demands found within the market rather than external controls, such as political mandates. The Market Economy, in its purest form, is free to react to the changing demands of consumers and provides natural incentives, and rewards, to those who successfully meet these demands. This is in contrast to controlled economies, such as those attempted in the Soviet Union and Communist China, where political authority sought to regulate markets and dictate the priorities, and pace, of production.
The principal of money, credit, and banking is essential to a free market economy. The principal makes capital possible for new businesses.
As of July 2014, the market cap for FreeSeas Inc. (FREE) is $12,837,522.00.
Mr Gerrard..... well what can i say about him?? in simple terms he is probably the best teacher ever.
In a free market economy, goods and resources are distributed by property and supply/demand.
Some decisions are taken by the households ad firms, like in a free market economy. Whilst some decisions and resource allocation policies are set by the government.
Scarce resources are allocated to those who are willing and able to pay the most in a free economy.
Some decisions are taken by the households ad firms, like in a free market economy. Whilst some decisions and resource allocation policies are set by the government.
Through prices
When a State planned economy transitions toward a free market economy they engage in privatization of resources. For privatization to be successful what must the State also do?
The three economic systems are the command economy, the free-market economy, and the mixed economy; they are all the same because they refer to the production and circulation of goods and services. In the command economy all resources are owned by the government, in the free market economy all resources are owned privately, in the mixed economy resources are owned by both.
Israel has a modern free-market economy.See the Related LinksThe main industries in IsraelIsrael's main exportsIsrael's resources
Central Planning: A centrally planned economy relies on a party in power to decide what resources should be allocated to various demands as they see fit.Free Market: A free market economy relies on prices to determine where demand should be filled and to what extent.Because of these differences, an economy that is centrally planned is usually inefficient in their allocation of resources to each market. They decide beforehand which areas will get resources, restricting the supply and setting a price with no knowledge about the consumer's choice.A free market is much more adaptable, using price as a communicator, supply, demand and price interact to form equilibriums that satisfy market clearing outcomes. This system is much more efficient in that the people who value the goods most are able to get them. This is the idea, it doesn't always work perfectly.
A free market economy
Centrally planned economy