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Capitalism in a competitive market

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Q1. What role does freedom play in capitalism? How important is it to the operation of a competitive market economy?

Q2. Explain why the market system is an organizing mechanism.

Q3. Describe and give a reason for the law of supply.

Q4. What is the difference between a change in supply and a change in quantity supplied?

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This solution discusses the role does freedom play in capitalism and how important it is to the operation of a competitive market economy. The dynamics of the market such as the law of supply and demand is discussed.

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Q1. What role does freedom play in capitalism? How important is it to the operation of a competitive market economy?

Freedom is synonymous with capitalism. Embedded in capitalism is the freedom to choose the product that the consumer wants. Without a freedom of choice there will be no competitive market economy. Without freedom of choice, the law of supply and demand gets distorted.

Q2. Explain why the market ...

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