The market mechanism benefits the community where the public can know the price of the product by the demand and supply so that the community can determine what products will be purchased in which the market mechanism will make the demand and supply prices balanced.
<h2>Further Explanation
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The market mechanism is the tendency in a free market for a price to change until the market becomes balanced (the amount offered is the same as the amount requested).
1. Request
Demand is the desire of consumers to buy an item at various price levels over a certain period, which is accompanied by a willingness and ability to buy the item.
The law of demand reads: "The higher the price of an item, the less the number of goods requested or sold and vice versa".
2. Offer
Offer is the number of goods that producers want to offer (sell) at various price levels during a certain period.
The law of the offer reads: "if the price goes up, then the amount offered also goes up and vice versa".
Strengths and weaknesses of the market mechanism
1. Strengths
- The Market Can Give More Correct Information.
- Developing Business Activities.
- Acquire Modern Expertise.
- Production Efficiently and efficiently.
- The market provides high freedom.
2. Weaknesses
- Unlimited freedom oppresses certain groups.
- Economic Activity Is Very Unstable.
- Market Systems Can Cause Monopoly.
- Market mechanisms cannot provide certain types of goods efficiently.
- consumer and producer activities might cause adverse "externalities".
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definition of The market mechanism brainly.com/question/4608480
Strengths and weaknesses of the market mechanism brainly.com/question/4608480
Details
Grade: High School
Subject: Business
keywords: The market mechanism
