Free Market Essay

Published: 2020-01-29 15:02:42
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Category: Market

Type of paper: Essay

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According to the Investopedia, a free market system is a market economy based on supply and demand with little or no government control. It is a completely free market in which buyers and sellers are allowed to transact freely based on a mutual agreement on price without Government intervention in the form of taxes, subsidies or regulation. Therefore, the free market system is good for Belize. Belize positively benefits from this system because it ensures competitive markets, the consumers are part of the decision making process, and the supply and demand create competition.

The free market system is good for Belize because it ensures competitive markets. There is a need for competitive markets so that we have the survival of the fittest. We need to have the best businesses so that we have more chances of developing as an economy. The fittest businesses bring better opportunities for the society since they will have better quality and service. Also by having competition, it brings about many benefits to the consumer. This may be seen for example in the case of Digicel and Smart, whereby there competitiveness is so high that they give so many advantages to their customers through their regular promotions.

In addition, by having the best businesses we have better chances to survive as an international business. Consumers voices are heard in that their decisions determine what products or services are in demand. This is another advantage of Belize having a free market system. In all reality, the consumers are the ones to decide which business stays and which go. The consumers know what they want and need, it is from this that they decide what to buy and consume. For example, most people from Orange Walk would prefer tacos over burritos.

This is clearly seen by the increasing numbers of tacos vendors and a small if any number of burrito vendors. If a burrito stand would open, it is probable that it would not have enough demand so hence it would shutdown. Supply and demand create competition, which helps ensure that the best goods or services are provided to consumers at a lower price. This will lead the businesses to having better quality and service and by having this the business itself becomes an overall better business. This benefits the society because they are receiving better goods and services and at a lower price.

An example would be the fruits and vegetables sold at the market. Different stalls at the market may have different prices, so the consumer may have the option to buy the one with the lowest price or the one with the best quality. If the good is bought based on the lowest price then the other stalls will need to lower their price as well because if they dont then they might not sell their goods. In an article by Chris Seabury, he states that in the United States those who want the removal of government intervention say the free market would force the businesses to protect the consumer.

This in turn would provide the customers with quality goods and services at low price. Also he stated that there are several disadvantages to having government intervention. Government intervention can create a huge government bureaucracy, it can create huge monopolies, and it can compress innovation by over-regulating. Firstly, government regulation creates a huge government bureaucracy that stifles growth. In USA many labor and environmental regulations force businesses to move jobs off shore, where they can find more reasonable regulations.

Secondly, government intervention creates huge monopolies. This will lead us, the customers, to having to pay higher prices for goods and services. For example, AT&T functioned as a regulated national monopoly in the 1980s and provided consumers with high telephone rates. Thirdly, regulation by the government compresses innovation by over-regulating. When there are too many regulations, the business will be at a disadvantage in its country. For example, in USA the coal industry has so many regulations that it is more profitable to ship coal overseas than to sell it domestically.

Overall, the free market system is good for Belize because it creates opportunities for the economy and benefits the consumers in many ways. The free market system is not perfect but it has many advantages that may lead the country on the path to development. The free market system creates benefits such as ensuring competitive markets, making the consumers part of the decision making process, and supply and demand creating competition. All in all, the government becomes inefficient when it creates bureaucracy that increases the cost of doing business for everyone.

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