ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -1. Market allocate scarce resources efficiently. This is the most commonly used argument, and is associated most strongly with the entire neoclassical economic tradition. Supply matches demand, markets clear, everybody maximizes their welfare.

Detailed explanation-2: -Market economies have little government intervention, allowing private ownership to determine all business decisions concerning how a business is run. This type of economy leads to greater efficiency, productivity, and innovation.

Detailed explanation-3: -Supporters of a free market economy claim that the system has the following advantages: It contributes to political and civil freedom, in theory, since everybody has the right to choose what to produce or consume. It contributes to economic growth and transparency. It ensures competitive markets.

Detailed explanation-4: -Key Takeaways In a command economy, governments own the factors of production and set prices and production schedules. In a market economy, prices are set by supply and demand. Most nations operate largely as a command or market economy but all include aspects of the other.