Answer to Question #1630 in Microeconomics for abdul sami

Question

Advantages and disadvantages of capitalist economy?

Answer 1

Advantages:
Dynamic market is always orientated to consumer preferences, new trends. Due competition between each other companies have to cut the costs. Orientated to the profit, controlled by the supply-demand balance, the market is self-regulating stable system.

Disadvantages:
There is a social inequality, huge gap between the rich and the poor. With free market system the companies are allowed to provide monopoly policy in pricing and wage workers.