The Effects of No Government Regulation Versus Government Regulation on Free Markets
By: Jonathan Reams
Macroeconomics 210-007
April 2, 2015
Abstract
A free market economy is a market-based economy in which the prices of the goods are created by supply and demand without the interviewing of the government. America was founded on this type of economy and has been thriving ever since, with the exception of a couple of misfortunes. In this article, Free Markets: What’s the cost? , Chris Seabury discusses the pros and cons of a free market style economy. Seabury gives examples and goes in detail explaining that although a free market economic system has proven to be very successful and prosperous, many people …show more content…
The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good” (investopedia.com). The law of demand has a downward slope that demonstrates how people will avoid buying a good that stops them from buying a good that they value more. A good example of the Law of Demand is if a local grocery store lowers the price of lemons from $2.00 to $1.50 it would make the consumers want to buy more of the lemons at the cheaper …show more content…
, Seabury elaborates on the main issue of a free market, which is more government regulation or none at all in this economic system. Each side has both its benefits and disadvantages. There have been “experiments” with both of these economic strategies to possibly decide if one is more efficient than the other.
In a free market with no government regulation the advantages include the insurance of competitive markets, contributions to economic freedom, allowance of the people to exercise political and civil freedoms, the consumer’s decisions mean a lot and are the deciding factor in determining what products and services are in demand, and a competition that is created by supply and demand (Seabury pg.2). When there is a free market, it creates a high level of competition is created by the efforts to see which business can have the highest level of quantity supplied for the best price. Free markets allow the people of America to exercise their rights to own their own businesses. Lastly, a free market becomes more dependent on the consumer, so it can find and maintain equilibrium. An equilibrium between supply and demand results in stable prices. The equilibrium of stable prices is what the producers and consumers strive for
By: Jonathan Reams
Macroeconomics 210-007
April 2, 2015
Abstract
A free market economy is a market-based economy in which the prices of the goods are created by supply and demand without the interviewing of the government. America was founded on this type of economy and has been thriving ever since, with the exception of a couple of misfortunes. In this article, Free Markets: What’s the cost? , Chris Seabury discusses the pros and cons of a free market style economy. Seabury gives examples and goes in detail explaining that although a free market economic system has proven to be very successful and prosperous, many people …show more content…
The amount of a good that buyers purchase at a higher price is less because as the price of a good goes up, so does the opportunity cost of buying that good” (investopedia.com). The law of demand has a downward slope that demonstrates how people will avoid buying a good that stops them from buying a good that they value more. A good example of the Law of Demand is if a local grocery store lowers the price of lemons from $2.00 to $1.50 it would make the consumers want to buy more of the lemons at the cheaper …show more content…
, Seabury elaborates on the main issue of a free market, which is more government regulation or none at all in this economic system. Each side has both its benefits and disadvantages. There have been “experiments” with both of these economic strategies to possibly decide if one is more efficient than the other.
In a free market with no government regulation the advantages include the insurance of competitive markets, contributions to economic freedom, allowance of the people to exercise political and civil freedoms, the consumer’s decisions mean a lot and are the deciding factor in determining what products and services are in demand, and a competition that is created by supply and demand (Seabury pg.2). When there is a free market, it creates a high level of competition is created by the efforts to see which business can have the highest level of quantity supplied for the best price. Free markets allow the people of America to exercise their rights to own their own businesses. Lastly, a free market becomes more dependent on the consumer, so it can find and maintain equilibrium. An equilibrium between supply and demand results in stable prices. The equilibrium of stable prices is what the producers and consumers strive for