Why aren't free markets perfect?
Topic: Why aren't free markets perfect?
June 27, 2019 / By Allie Question:
I'm self-studying microeconomics before college (my hs doesn't offer econ) and got stuck at the last essay question on this website I found.
Here's the question.
Proponents of free market systems argue that free enterprise leads to more efficient production and better response to changing consumer preferences. But others point to the fact that markets are not perfect. Why aren't markets perfect?
just for reference: http://wps.prenhall.com/bp_casefair_econf_7e/30/7931/2030401.cw/index.html
this was my answer: (totally bs'ed)
Outside stimuli will continue altering the current market as in nature with natural selection. The market continually improves itself but because it has to keep up with its environment, it is never truly perfect.
Best Answers: Why aren't free markets perfect?
Uz | 9 days ago
Is anything truly ever perfect? What is perfect, and how do we calculate it?
For example lets look at a market. What is a market and why does it exist? A market only exist from the voluntary actions and transactions of individuals pursuing their own interest. So it is a man-made mechanism that is made up of imperfect beings, and exist for the sole purpose to exchange goods and services that people wish to acquire. In my opinion a free market for the most part is a self-regulating mechanism that allocates resources with alternative uses quite well. But my opinion is subjective, just like anybody else's perception of "perfect"
👍 226 | 👎 9
Did you like the answer? Why aren't free markets perfect?
Share with your friends
Originally Answered: Do businesses at flea markets earn a regular amount of money?
I have sold in flea markets. Every one is different. The only way to know is to try it. Every business needs to test the customers for demand of the products. The way to do this is to open at the flea market at the lowest price you are willing to take for your shoes. If no one buys then you know it will not work. If too many buy you can raise your prices the next week. Flea markets demand for anything goes up and down so if after 3-4 weeks it is not selling enough for you then just get out. People do buy shoes at flea markets and they expect to pay at least 50% less than payless shoes. If you pay more than 25 to 35% of what payless shoe store charges for shoes you are paying too much and will not be successful at all. Shoes should not cost you more than a one us dollar or possibly as much as two dollars a pair or you are paying too much and will never make enough selling them at 1/2 discount shoe store prices, so about 7-12$ to your flea market customer.
The simple answer is, markets aren't perfect because people aren't perfect.
A slightly more Economic answer is, markets aren't perfect for several reasons; such as the imperfect exchange of information, the fact that not all people are rational all of the time; and any market is built upon a framework of laws and traditions, and often imperfect laws create perverse incentives in the market.
👍 90 | 👎 2
It is perfect if we give long enough time to adjust,called the long run.Invisible hand can really solve all of the problems.But we have to suffer from boom and bust,until it reaches the bottom,or peak. People will come in and criticize before the process is going through.
👍 82 | 👎 -5
Its simple,it is not perfect owing to its coordinated with violation. In other word,politicaly disturbance hindared the market as there is less willingness in investment to the people.
👍 74 | 👎 -12
Originally Answered: Is it possible to make money at craft sales or flea markets selling handmade goods?
The secret to this is PATIENCE!! My husband and I are both very crafty people. He & I both go to crafts fairs and farmers markets. some days are better than others. the first one we went to, we only "made" about $100. That covered the cost of our table, and very little of our aupplies. But we gained experience. We did a lot of research before we started to get ideas on pricing and what kinds of things sell. I still have most of the articles saves on my computer; I can send them to you if you send me your email address. One option that we also did was start a small business website. We sometimes sell more that way than through the craft fairs.