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Free Market

Why will a free market produce too much of goods that have negative externalities, like pollution?

Why will a free market produce too little of goods that have positive externalities, like pollution controls?

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Free market is a market place which supply and demand is unregulated except by the government competition policy, and rights in physical and intellectual property are upheld. There are no artificial barriers put in place by the government to restrict the flow of goods and services between trading nation. Free market economy also as known as Market economy, Free Economy and Free- enterprise Economy.
In the free market economy, firm can improves the efficiency of resource allocation. The more efficient use of resources leads to higher productivity and increasing total domestic output of goods and services. It also increased competition promotes innovative production methods, the use of new technology, marketing and distribution. ...

Solution Summary

Free market is a market place which supply and demand is unregulated except by the government competition policy, and rights in physical and intellectual property are upheld. There are no artificial barriers put in place by the government to restrict the flow of goods and services between trading nation. Free market economy also as known as Market economy, Free Economy and Free- enterprise Economy.

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