Question

What is a benefit of a laissez-faire market?

Answer 1

C) Encourages creativity

Answer 2

The correct answer is C.

In a laissez-faire market there is no goverment intervention. Economic decisions are reached by the free interactions of the economic agents (households, firms and public sector) in the markets. Prices and exchanged outcomes are determined by the equilibrium between the desires of producers and consumers.

The abovementioned freedom that economic agents enjoy in the markets, allows them to be as creative as they want to pursue the market outcome that  they believe will be more benefitial to them. Therefore, creativity is fostered in this system, if compared to systems where market outcomes are preestablished and agents can simply adapt themselves to them (for example, in a centrally planned economy).