Question

explain how suply and demand functions in the free market system. what is the equalibrium?

Answer 1

In a free market system,the supply and demand functions as:-

1.Highest price consumers-The companies sell their goods and services at high price to consumers,as there is no or little government control.

2.Highest wages-In free market system,the workers earn the highest wages,as companies are willing to pay.

3.Self regulated economy-A free market economy is also known as self-regulate economy that works according to demand and supply of goods.

4.Prices for goods and services-Prices for goods and services are free from supply and demand forces which helps in reaching at equilibrium without government control.

Equilibrium-Equilibrium is a situation in which supply and demand are balanced or is a point at which quantity demanded and quantity supplied are equal or in other words we can say the quantity of goods produced and sought by buyers are equal.

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