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leonid [27]
4 years ago
13

What are the advantages and disadvantages to capitalism

History
2 answers:
makkiz [27]4 years ago
8 0

Answer:

Explanation:

The advantages of capitalism include:

Consumer choice - Individuals choose what to consume, and this choice leads to more competition and better products and services.

Efficiency of economics - Goods and services produced based on demand create incentives to cut costs and avoid waste.

Economic growth and expansion (which is possible in the capitalist economy system) - This increases the gross national product and leads to improved living standards.

The disadvantages of capitalism include:

A chance of a monopoly of power - Firms with monopoly power (when a specific person or enterprise is the only supplier of a particular commodity) can abuse their position by charging higher prices.

Inequality - A capitalist society is based on the right to pass wealth down to future generations. If a small group of people hold all the wealth and that wealth continues to be passed down to the same groups of people, inequality and social division occur.

Recession and unemployment - An economy based on the market of consumers and producers is invariably going to experience growth and decline.

dybincka [34]4 years ago
5 0

Explanation:

Pro-

Efficient Allocation of Resources.

Efficient Production.

Dynamic Efficiency.

Financial Incentives.

Creative destruction.

Economic freedom helps political freedom.

Mechanism for overcoming discrimination and bringing people together.

Cons-

Monopoly power. Private ownership of capital enables firms to gain monopoly power in product and labour markets. ...

Monopsony power. ...

Social benefit ignored. ...

Inherited wealth and wealth inequality. ...

Inequality creates social division. ...

Diminishing marginal utility of wealth. ...

Boom and bust cycles.

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