Pros And Cons For A Free Market Essay

1463 Words Jan 10th, 2015 6 Pages
Pros and Cons for a Free Market of Healthcare in the U.S. A free market represents the ability to perform an exchange between two or more persons. This voluntary agreement can comprise of money being exchange for goods or services. An example is the child who receives an ice cream cone from the ice cream man in exchange for a dollar. Both parties partake in the transaction because of the perceived benefit each is to gain. The child delights in the treat, while the ice cream man has an extra dollar to reinvest in his business. This simple model highlights the foundation for beneficial trade between persons and businesses. In a free trade market, the prices for goods and services are set freely. The supply and demand for such goods and services will allow vendors to establish prices. When prices are set to high demand will decrease. Conversely when prices are set low demand will increase. For such essential services, where initial competition is lacking high profits can be made however these abnormal profits come at the expense of future profits. Connors (2014) identified high initial profits lead to lower future profits because it attracts increased imitation and competition. As more offerings become available prices drop until equilibrium is established between what the consumer is willing to pay versus what the supplier is willing to accept. The health care system, in the U.S., is not considered free trade markets. Government intervention in the form of…

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