Essay about The Free Markets And Its Effect

967 Words Sep 9th, 2016 4 Pages
The Free Markets and its Effect

“A free market is a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.”

In the video,” From the Expert” an illustration is presented of an apple tree and the height of the apples needed for harvesting. The video goes to show how picking the lower hanging apples yield a higher profit than the apples that are midway up the tree. Also the apples on the very top of the tree, although some of the best apples, due to the cost of the labor to harvest them they do not yield a profit and should not be picked. Marginal cost analysis is when a business such as the apple farmer, focuses on the impact and on the cost of producing an individual unit and comparing these individual results. So bottom apples, apples midway, apples at the top. In this example the optimal solution is to only harvest the low and middle level apples, as they yield the highest profitability. Because the farmer decides not to harvest the apples at the very top, leaving these apples, some in our society might be outraged that food was going to waste because profit margins. Suboptimal from society 's’ perspective is something should be done and shouldn’t the government do something? But a free market; “an ideological or legal system of organization, in which commercial activities are…

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