Which of the following is not an advantage of a free market economy?
a. efficiency
b. growth
c. equality
d. freedom

Equality is NOT an advantage of a free market economy.  

A free-market economy is an economic system where rule by the supply and demand with a little to no government involvement. Most of the resources, equipment, buildings, goods, and services in a free market economy own by individual and private business.

In the free market economy, goods and services that are not or less profitable will not be produced. This will increase the problem for some community. Large firms can still dominate certain markets, even where there is a competition. This situation will wider the income gap and social problems.

However, there are some advantages of a free-market economy as follows:

1. Ensure a competitive market  

Supply and demand create competition atmosphere, which helps ensure that consumers get the best goods or services at a lower price. This competition also stimulates economic growth.

2. Optimum allocation of resources

Supply and demand determine what and how much goods and services to produce, so resources are better distributed and allocated. It also encourages firms to be more efficient as they seek to produce at the lowest price possible to maximize their profit.

3. Wider variety of goods and services/freedom  of choice

Goods and services produce based on consumer demand not by government regulations.

4. Absence of bureaucracy  

The absence of bureaucracy also reduces the cost of doing business for everyone.

Characteristic of market economy

A command economy

The function of the economic system

Keywords: market economy, the advantage of a market economy, the disadvantage of a market economy. free economy market

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