. Has a private sector only
. They produce a wide variety of goods and services if it is profitable to do so but only for those consumers that are willing and able to pay for them.
. Market failures can cause scarce resources to be allocated to uses that are wasteful, inefficient or even harmful to people and the environment.
. ADVANTAGES
1) Wide variety of goods/services
2) Profit motive encourages development of
new and more efficient products &
processes.
3) Quick response to change in consumers
tastes and demand.
4) No taxes on incomes and wealth or goods and services.
. DISADVANTAGES
1) Serious market failure
2) Only profitable goods are provided
3) Firms will only supply products to
consumers with the ability to pay.
4) Resources will only be provided if it is
profitable to do so.
5) Harmful goods may be available to buy readily.
. They produce a wide variety of goods and services if it is profitable to do so but only for those consumers that are willing and able to pay for them.
. Market failures can cause scarce resources to be allocated to uses that are wasteful, inefficient or even harmful to people and the environment.
. ADVANTAGES
1) Wide variety of goods/services
2) Profit motive encourages development of
new and more efficient products &
processes.
3) Quick response to change in consumers
tastes and demand.
4) No taxes on incomes and wealth or goods and services.
. DISADVANTAGES
1) Serious market failure
2) Only profitable goods are provided
3) Firms will only supply products to
consumers with the ability to pay.
4) Resources will only be provided if it is
profitable to do so.
5) Harmful goods may be available to buy readily.