Wednesday, November 7, 2018
Advantages and disadvantages of market economy|
In our previous article we have discussed about the concept of market economy and its features.You had not read it press here to read it.In this article lets discuss some of the advantages and disadvantages of market economy.
Advantages of market economy.
1.Freedom for consumers
one of the advantages of market economy is that there is freedom for consumers in the market.Consumers can choose goods in several markets like in Nepal,China,India etc as per their interest,financial capacity and só on.They are free to purchase the number of goods as per their desire.
2.Mobility of factors of production
The next advantages of market economy is that factors of production are perfectly mobile i.e they can go from one place to another place if they get better opportunity there.For example-A lecturer of economics,who is working in littel angles college can go in new horizon college,global college etc,if he gets salary and other benefits over there.
3.perfect competition
The next advantages of market economy is that there exists perfect competition in both product and factor market.The prices of goods and services are determined with the help of market forces-demand and supply in respective market.
Disadvantages of market
1.creates Economic inequality
One of the major disadvantages of market economy is that it creates gap between rich and poor in the society.Majority of the productive resources are captured by very few rich people.On the other hand,more people are surviving with very few resources.So,there is unequal distribution of income and resources in the country.2.private sector domination
In market economy,majority of the economic activities and allocation of resources are carried by private sector.Government has very limited roles in this economy especially,maintaining law and order,printing money,providing public services,developing infrastructures,etc.
3.Profit motive
Market economy is dominated by private sector.They carry their economic activities being profit motive rather then service motive as their goal is profit maximization.
