Explain why many economists argue that the free market benefits both sides of the market

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Expert Solution

Yes, It is true that the free market benefits both sides of the market i.e. consumer and producer.

A free market has features like free entry and exit for the producer, Private ownership, freedom of choice and free enterprise and Zero government interference and the market is driven by the motive of self-interest.

Such features in the free market allow both the seller and producer of the good to make a free decision based on their own self-interest, a consumer is allowed to consume as much as they want and the producer can sell as many goods as they can and at a most competitive price. Government interference in all this zero.

In a market which is not free, the government makes the decisions and it affects the normal growth of the organization. As everyone works on their own interest benefit of both the seller and buyers are insured, prices are determined by the competitive forces of demand and supply in the market.

Competition ensures a greater transparency in the market and the producers are free to innovate and take business risk all in the benefit of the economy. Some economist even says that free market helps in establishing a free society.

Rahul Sunny answered 1 year ago

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