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Any profit or loss made in this process goes to the individuals who own the company. The resources are allocated by the market, this is because market prices will tell the producers what to produce, how to produce and in which quantity. Individuals also own the production units, completely contrary to the planned economy where the state owns them. Consumers have choice. This is very important because it stimulates competition among producers forcing them to produce more efficiently in order to meet the consumer’s wants. Because producers want to succeed and make profit, they have to try and maximize consumer satisfaction...
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Common topics in this essay:
- Market Economy Vs Command Economy
- A Market Economy
- Command Economy Vs Free Market Economy
- Free Market Economy
- How has the level of employment/unemployment and national minimum wage legislation impacted on the economy as a whole and how will this effect the economy in the years to come?
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