Question

Give an example in the marketplace that describes the principles of the free market and competition.

Answer 1

Answer:

Global market

Explanation:

In the global market the countries has a free setting of their prices to compete with the world. There, no organization is big enough to regulate the global market and therefore countries are free to negotiate the prices without the intervention of a regulatory institution. Some organizations, as OPEC e.g tried to monopolize and regulate the petroleum production, but a free-market can operate against the high prices generally originated from a cartel, offering a low price alternative. No cartel is big enough to cover all production in a global scale.

Decisions about what is produced, in what quantities, by what methods and in which locations are made with the aim of satisfying consumer demands. In the global market case, the countries demands. When companies operate in an environment of free competition, they must strive to discover as quickly as possible what their consumers want, as they can only make profits when they meet the consumer's wishes. Otherwise, your business will fail; because the consumer can buy from another company or simply not buy your product or hire your service.