Question

A free market is one in which the prices of goods and services are determined by the interaction of the suppliers and the demanders without the intervention of the government or any other external agent. In a free market, there is no limitation on the price at which it can be sold or the quantity to be produced. Sellers are free to sell what they want and consumers are free to choose who they will buy from. The equilibrium price will be the result of the intersection of supply and demand. The free market presupposes essential economic conditions, such as free competition. In which there are no restrictions for the free entry and exit of companies, and where consumer sovereignty prevails. So, on one front is the producer and on the other the consumer. Both producer and consumer solve their needs for the exchange of goods and services in complete freedom.

Pros:
Among the advantages of a free market system, consumers' freedom of choice stands out. Thus, the adjustment between supply and demand is, in theory, more faithful to economic reality. That is to say, the free market allows that according to economic theory prices have a price very close to the true value that the consumer perceives.

Cons:
The free market does not take into account distributional issues, so there can be great inequalities between people's income and their quality of life. Furthermore, the free market can fail when the conditions are not met for there to be competition in the market.

HOW WOULD I REPLY TO THIS?

Answer 1

Over the years, numerous economies have expanded themselves and have broken the shackles of protectionism as they realize that reducing imports only leads to measures by other countries to limit imports from specific countries and thus the overall productivity of labour force and the foreign reserves suffer.

Countries have begun to realize the importance of free trade economics, in which the forces of demand and supply play a big role in deciding what goods and services would be produced in a country.

The core reason for this is that consumers and producers both gain from such an arrangement. Consumers on one hand receive higher satisfaction from the goods and services which they consume as the level of competition gives them better products, and producers receive higher profit margins as the cost of production goes down due to international demand rising as well as costs of raw materials reducing over a period of time.

Even though, some people argue over the fact that developing countries such as China and India have deplorable working conditions for the labour force, yet over a period of time, their income levels have gradually increased and they are gaining from the expansion and growing in two digit figures which not most economies have been able to achieve.

Thus, in opinion, expansion of global trade as well as reduced tariffs and market-based economics allows for better living conditions, increased exports and overall level of competition. Even though some small industries may not receive equal benefit and die out of competition the reason for that is their lack of competitiveness and not that foreign companies exist in the markets.

Please feel free to ask your doubts in the comments section if any.