The Free Market System, Demand And Supply And Allocation Of Resources

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In this easy there will be an introduce of these topics: the free market system, demand and supply and allocation of resources, and there will be some definition of these topic, also there will be references to support the writing. The final thing is concluding Free market system is when prices and wages are determined by competition between businesses, without government regulation and not leading the market to have monopolies sector. (Eller, E. P. (n.d.)). In a free market system there are competition high.Therefore business will want to produce their goods or services at a lower production cost. For example using non-environmentally friendly methods. In free market system governments have limited role.The government are not keen…show more content…
By this the government can prevent monopolistic sector, so that there would be more competition. (Eller, E. P. (n.d.)). (Griffiths, A., & Wall, S. (2011)) The total amount of funds that an individuals want to spend on goods or services over a specific period. (Horner, D., & Stoddard, S. (2015)) A particular good or service that a customer will want to purchase at a given price. When the price decreases customer will want to buy more, but when the price increase customer will not willing to consume a large amount. Demand for a good or service are determined by many different factors other than price. For example the price of substitute goods and complementary goods. As the graph illustrate that the price at £0.50 there are only 100 quantity demand but if the price decrease to£0.20 the quantity demand is 400. (Horner, D., & Stoddard, S. (2015)) (Anderton, A. (2015)) The total amount of a product that is available in the market to purchase at any specified price. (Horner, D., & Stoddard, S. (2015)) A supply graph illustrate that there is a relationship between price and how much a business is willing and able to sell. Supply is the quantity of a product that a supplier is willing and able to supply into the market at a given price and in a given time period. As the price of a product increase the supplier are more willing to supply, however if the price decreases the supplier may not be willing to supply as much as
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