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Markets are the ideal way to organize everything. They give equal opportunity to all and are...

Markets are the ideal way to organize everything. They give equal opportunity to all and are engines of efficiency ensuring the most productive use of our resources.   Agree or Disagree? Give examples in either case.

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Answer #1

Answer - I agree with the given statement. Market is reposible for the efficient allocation of the goods and services ensuring that the surpluses in the market are maximised. The surplus here means the consumer and the producer surplus. Through the mechanism of demand and supply , equilibrium price and equilibrium quantity is found out which ensures that both the surpluses are maximised.

For example - If there exists the surplus in market such as supply is greater than demand. Then demand will fall as a result of greater price. With fall in demand , price will come down and supply will decrease. This will help to achieve equilibrium.

Hence the market ensures that allocation of resoureces as well as goods and services is done efficiently.

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