Competitive Market

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  • Created by: lizaloo98
  • Created on: 06-04-16 13:03
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  • Competitive Markets
    • The price mechanism
      • This is when changes in the demand or supply of a good/service lead to changes in its price and the quantity bought/sold
    • Mixed Economy
      • An economic system in which resources are allocated through a mixture of the market and direct public sector involvement.
      • combination of government intervention and free markets
      • Best of both
        • Public and private sector
      • e.g. UK, France, Hungary, Czech Republic
    • Command versus Market Economy
      • Disadvantages of free market economy
        • Inequalitiy of income due to people being unemployed as they cannot work
        • Non-Profitable products like new medicines not being made
        • Monopolies
      • Advantages of Market economy
        • Efficiency: as firms will try to produce more efficiently to allow more demand and therefore more profit
        • Enterprise
          • As firms will get better rewards with new products due to market forces
        • Choice: as new products will be made and demands and supplied
    • Centrally Planned/Command Economy
      • An economic system in which most resources are state owned and also allocated centrally.
      • e.g. North Korea
    • Free Market Economy
      • An economic system whereby resources are allocated through the market forces of demand and supply.
      • e.g. USA,


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