Advantages and Disadvantages of Market and Mixed Economies

In this discussion we will discuss some of the advantages and disadvantages of both market and mixed economies. To begin our discussion we will first talk about the advantages of a market economy. A market economy is known as a “free market economy”. It is controlled by the law of supply and demand which in return will determine the price of services and goods. In a market economy the exchange of goods, services, and information take place in a freely according to the supplier and the buyer. Which means the entire market is merely driven by the sellers and the buyers with very few government regulations.

The positive on this type of economy is sellers can sell according to the demand of buyers, in return buyers pay for what they want, not necessarily what the government makes available to them. The downside to a market economy is there are some times needs for regulations to keep certain sellers from creating a monopolistic behavior. Another problem with a market economy is certain goods and services like law, medical, and education are inadequately provided. Medical expenses can be outrageous due to lack of regulations on cost.

A mixed economy permits private participation in manufacturing and production which in return allows healthy competition that can result in profit. On the other hand it also contributes to public ownership in fabrication and manufacturing which can take full advantage of social welfare. In a mixed market economy this system is governed my licensing and regulation polices. However, because the public also has control of the economy this facilitates transition.

The advantages of this type of market allow competition amongst providers with regulation in place to protect society as a whole. With the government being present in the economy it brings a sense of security to sellers and buyers. This security helps maintain a stable economy