Competition is the o find out new techniques of production in order to reduce economic wastage and to increse economic main basis of market economy. The competition among producers inspires every producers to produce cheaper and better quality goods. This leads to economic efficiency. Every effort is made efficientcy.
The persons of all income groups enjoy a better standard of living in a market economy. They have more income, more leisure, more comforts and more luxuries than the people of any other economic system. Goods and services are within the reach of even poor people. The best quality goods at responsible prices have in fact improved the standard of the people in a market economy.
- Efficient use of Economic Resources
In a market economy, wastage of any economic resources means losses. At the same thime, efficient use of economic resources increase production and hence profits. Sp everu effort is made to put the available resources to the best and optimum use.
Everyone gets adequate incentives to work in a market economy. Ownership of private property, laws of inheritance and hope for profits and better wages inspire everybody to work hard and earn more and more income under market economy.
Economic freedom is the basis of market economy. There is a freedom of consumption, production and enterprises. Everybody is free to spend on anything and in any way. There is a freedom to save and invest up to any extent. Every producer is free to produce any commodity he likes. Thus, economic freedom is the backbone of market economy.
- Flexibility and Automatic Operation
A market economy is a flexible economy. It changes itself quickly as per circumstances. The market economy is an automatic system. There is no external authority or planning board to regulate the fuctioning of a market economy. Prices of goods and services are determined automatically through demand and supply forces. There is an 'invisible hand' of price mechanism which solves all the central economic problems.
- Rich Variety of Goods and Services
In a market economy, a consumer is a king. Goods and services are produced as per his chice and liking. So, different types of goods and services are produced in tune with the test of different consumers. In this way, the producers also enjoy maximum profits.
Market economy has promoted rapid economic growth. The economics such as USA, UK, Japan, France, etc. are enjoying the high rates of economic growth much due to the market economic system. The market economics have been very rich and affluent in the world.
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