ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In a capitalist economy, the prices of all goods and services will be decided by the market forces exclusively, i.e. the demand and supply of goods.

Detailed explanation-2: -free market, an unregulated system of economic exchange, in which taxes, quality controls, quotas, tariffs, and other forms of centralized economic interventions by government either do not exist or are minimal.

Detailed explanation-3: -Market prices are dependent upon the interaction of demand and supply. An equilibrium price is a balance of demand and supply factors. There is a tendency for prices to return to this equilibrium unless some characteristics of demand or supply change.

Detailed explanation-4: -In a market economy, the producer gets to decide what to produce, how much to produce, what to charge customers for those goods, and what to pay employees. These decisions in a free-market economy are influenced by the pressures of competition, supply, and demand.

Detailed explanation-5: -In free price system, the basic economic system is driven by Supply and demand primary drivers. This approach offers opportunities to the companies to produce and market goods & services as per the consumer demand.