Question

Which are the main arguments in favor of free market? provide real world evidence that supports one of these arguments and also provide one real evidence that does not support one these arguments

Answer 1

Four arguments in favor of free market are –

1. A free market allocates resources efficiently. Hence, the competition is fair.

2. A free market makes available of all information. No one has undue advantage over the others.

3. A free market encourages innovation that enhances goods and service quality at competitive rates to consumers.

4. A free market limits anyone’s dominance. No one player can dictate prices. Every thing is controlled by demand and supply.

The logic behind free market can be understood through the availability of internet data these days. There are many players in the market and hence any technological upgradation that reduces cost for the company, the benefits are quickly passed on to the consumers in the form of cheap data.

The culture of free market has led to mushrooming of many startups with little research and heavy investment. Many dot com companies went bust during the 1999-2000 period.