Social Sciences, asked by kalinditiwari491, 1 day ago

write any four feature of market mechanism system​

Answers

Answered by aaryaniyer24
22

Answer:

The features of market mechanism system of allotting resources are as follows:

1. Ownership of resources of production is either private or individual.

2. Economic decisions are taken while keeping price mechanism in mind.

3. Economic decisions are taken only after keeping personal interest or profit.

4. Price mechanism takes care of production and income distribution.

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Answered by vandana2293
3

Answer:

Market mechanism in allocation of resources

Market mechanism system is also known as the Capitalist method. In this method, the process of resource allocation is decided by the market mechanism. Its related economic decisions include:

1. Which item to be produced?

2. In what measure to be produced?

3. How to distribute the production?

4. On which basis to pay for the machines involved in the production?

5. Which measures to be adopted to increase production?

6. Which measures to be adopted to decrease the cost of production?

DEFINITION

Price Mechanism of Allocating Resources

In the Capitalist method, money and price mechanism are supreme. People put forward their demands for various commodities and services through the market mechanism. People have to pay more money for the commodities that are much in demand. Entrepreneurs produce goods keeping in mind people's demand or customer's eagerness to pay a higher price. This is because the chief aim of entrepreneurs is to earn more profits. In the same way, they would like to invest in such production activity that would give the greatest return.

But, the price of any commodity would go down with a decrease in its demand. As the sale decreases, the entrepreneur's profit decreases or he starts making a loss. He, thus, stops or reduces its production.In this way, economic decisions are taken on the basis of the price mechanism in the Capitalist method.

DEFINITION

Features of Market Mechanism System

The features of market mechanism system of allotting resources are as follows:

1. Ownership of resources of production is either private or individual.

2. Economic decisions are taken while keeping price mechanism in mind.

3. Economic decisions are taken only after keeping personal interest or profit.

4. Price mechanism takes care of production and income distribution.

DEFINITION

Benefits of market mechanism system

The advantages of Market mechanism system include:

1. No wastage of resources of production

2. Abundant production

3. High lifestyle and inventions

4. Automatic and self-balancing

5. Growth of international market

DEFINITION

Limitation of Market Mechanism System

The limitations of Market mechanism system include:

1. Undesired waste of production

2. Unequal production distribution and income

3. Exploitation of labourers and customers

4. Rise in poverty and unemployment

DEFINITION

Social system in Market Mechanism

Social system evolved because of the failure of the Market or Capitalist method. In socialist system, all the economic decisions are taken by the state machinery. The state owns all the production of resources such as land, minerals, factories, and capital. There does not exist money and price mechanism in socialist system. But they are used only for settlement of account and comparative study. Economic decisions are taken keeping in mind the social welfare. Income is distributed equally and rationally in socialism. Differences between the rich and the poor are abolished and exploitation can almost be eradicated.

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