Describe the advantages of market economy

Whether the society is developed or underdeveloped, a market economy has several important advantages and several major disadvantages: Among the advantages, we find the following:Competition between different firms leads to increased efficiency, as firms do whatever is necessary—including laying off workers—to lower their costs;Most people work harder (the threat of losing one's job is a great motivator); There is more innovation as firms look for new products to sell and cheaper ways to do their work; Foreign investment is attracted as word gets out about the new opportunities for earning profit;The size, power, and cost of the state bureaucracy is correspondingly reduced as various activities that are usually associated with the public sector are taken over by private enterprises;The forces of production, or at least those involved in making those things people with money at home or abroad want to buy, undergo rapid development;

Many people quickly acquire the technical and social skills and knowledge needed to function in this new economy; A great variety of consumer goods become available for those who have the money to buy them; and Large parts of the society take on a bright, merry and colorful air as everyone busies himself trying to sell something to someone else.

Explain the functions of market economy

In a free market economy the price of different products gives information about the demand and supply of the products. The price of products increases when the demand rises as there are more buyers willing to pay a larger amount for the same product. Price also goes up when the number of producers supply a smaller amount of the product as they are in a position to demand a larger amount for the same product.

The demand and supply in a free market is also a function of the price. As the price increases the demand goes down and the supply increases. In a free market economy the price of different products gives information about the demand and supply of the products. The price of products increases when the demand rises as there are more buyers willing to pay a larger amount for the same product. Price also goes up when the number of producers supply a smaller amount of the product as they are in a position to demand a larger amount for the same product. The demand and supply in a free market is also a function of the price. As the price increases the demand goes down and the supply increases. In a free market economy the price of different products gives information about the demand and supply of the products. The price of products increases when the demand rises as there are more buyers willing to pay a larger amount for the same product. Price also goes up when the number of producers supply a smaller amount of the product as they are in a position to demand a larger amount for the same product. The demand and supply in a free market is also a function of the price. As the price increases the demand goes down and the supply increases. 

 10) Explain stimulating function of market economy and your example

The objective of this article is the disclosure of the essential and functional characteristics of economic systems development stimulation as a function of regulation in the market mechanism of interaction. The importance of theoretical principles of the meaning of regulation as a component of the factors providing economic management is described. The structural elements of formation the organizational and economic stimulation mechanism of economic agent interaction under market conditions are determined. The role characteristics of stimulation from the perspective of institutional concepts and in particular, neo-institutionalism are positioned, with the definition of roles in the process of transaction cost regulation. The author’s opinion concerning the tasks of stimulation under the transience of changes in the market mechanism as the institutional dynamic system of economic exchange, which is both the object of regulation and the subject of the regulation process.