Question

In: Economics

Analyze TWO reasons for why the free-market should be the means for the distribution of urban...

Analyze TWO reasons for why the free-market should be the means for the distribution of urban infrastructure and amenities, and TWO reasons for why the free-market should not be the means for the distribution of urban infrastructure and amenities.

Solutions

Expert Solution

Free market economy is one in which is based on demand and supply with little or no government control.

Analysis of free market economy as providing urban infrastructure.

Favourable points:

1. There will be Low wastage of resources as private hands will produce only those things which will have an effective demand rather than producing all the goods on a large Quantum so it would be preferable to to choose free play of market forces as the means of reducing urban infrastructure because urban infrastructure includes those goods and services which are required for meeting are coping up the present needs like transportation communication telecommunication and hospitality and all those things which are needed in the present time.

2. It Will lead to development and growth of the economy as a whole. Free market forces don't have much of government controls so they aim to make profits only. Profitability will generate so many monetary and non monetary benefits.

B. Disadvantages of preferring FREE MARKET for urban infrastructure:

1. social benefits will be completely ignored. No doubt urban infrastructure will lead to the development of the society as a whole and it will provide facilities to entire public but main focus will be towards providing those things which will earn generate revenue for the firms rather than working on the things that would be more beneficial to the public. Choosing free market will lead to the progress but it will lead to the the negligence towards the public benefits.

2. Main focus of replay market forces always to generate higher and higher profits but sometimes it's very important to work for the welfare of the country. Also there is no interference of government there would be monopoly practices as well which would lead to the negligence of welfare aspect of the market. so it would not be beneficial if you choose free play of market forces completely as a means of providing urban infrastructure to the economy.


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