What were some potential negatives smith explained could plague the free-market system?

1 answer:

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According to Smith the functioning of the free market requires an ethical position, for Smith justice has a fundamental function. The market mechanism does not require direct contact between consumers and producers. The relationship is usually indirect and is made through the prices and sales that occur in the market. If you want something and you have the money to buy it, it is done, and if there are enough people to do the same, the sales of that product will skyrocket and the rest of the companies will start producing more of that good and will employ more means.

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Contribution margin= $169

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First, we need to calculate the total unitary variable cost:

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