advantage and disadvantage
of market as a social
institution
Answers
Answer:
Market system automatically responds and adjusts to the people’s wants
As we know, in a market system, the price of goods and services are determined by the forces of demand and supply. If consumers want a particular good or a service, they simply demand for it and the prices go up, which gives signal for the producers to produce more of that good. If producers can produce the required amount of that particular good, the price automatically comes down to normal. Likewise, if people no longer wants a particular good, they simply stop demanding for it, so that it is no longer profitable for producers to produce that good, so producers stop producing that good.( ADVANTAGE )
Factors of Production is not employed if it is not profitable
In a market system, producers do not produce a good or a service if it is not profitable. But sometimes it may be necessary to produce some goods even if it is not profitable. Therefore Market system will fail in this aspect.( DISADVANTAGE )
Answer:
While a market economy has many advantages such as, fostering innovation ,variety ,and individual choice it also has disadvantages ,such as a tendency for an inequitable distribution of wealth ,poorer work conditions and environmental degradation