The Ideal Features of an Ideal Market Economy Analytical Essay

Exclusively available on Available only on IvyPanda®
This academic paper example has been carefully picked, checked and refined by our editorial team.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment

The most important virtue of a market economy is efficiency when it comes to the use of resources, capital, and labour. The main goal of the efficient use of the three is for the market to supply the demand for products and services. And this can only be achieved if ideal conditions are in existence. These are: a) competitors that cannot dictate prices; b) access to labour and capital; 3) the customers must know about the prices and the products that are available in the market; and 4) producers must have an idea what the market demands.

Aside from the existence of these conditions, there must also be the freedom to choose. Every participant of the market economy must have this freedom. They must be able to choose what they want and refuse what they do not want. In every transaction each party must realize that they have chosen the best. In other words the transaction that they entered into must be mutually beneficial.

Based on this discussion about the ideal features of an ideal market economy it can also be argued that advertising is an important component because the consumers must know what is available in the market. They must know the features of the products and what is included in the services sold by businessmen.

It is only after they are made aware of these products that they can make a decision which product and service to buy or patronise. However, experts in the field of economics are saying that advertising can have both a negative and positive impact to a market economy.

On one side they argue that advertising create demand when there should have been no demand and this would increase the price of goods that are in limited supply. At the same time advertising can create brand loyalty and a successful ad campaign will make the consumers believe that there is no other product that is much better than what they currently use. This made others to say that this blocks the entry of other competitors and since competition is needed to create an efficient economy then this is a problem.

Those on the other side made their counter-argument that advertising is good for the market economy because it pressures the brand leader to maintain high-quality or else their customers will buy the products produced by their competitor. They also add that advertising’s main purpose is to inform consumers and this is good for the economy.

And so, in order to resolve the issue many are saying that advertising must be allowed to continue only with one condition and it is for the producers to make truthful claims about their products. There are even those who said that this must be regulated – that no one should be allowed to create an ad that will make consumers use products or services that will harm them.

In order therefore to have an ideal market economy where the needs of the consumers are met while the producers or entrepreneurs make money there is a need to have an efficient use of resource, capital, and labour. There must also be advertising because the consumers should know what is available in the market. However, advertising can be good or bad depending on how producers use it. If they use it to inform then it is good but if they use it to deceive then it is bad.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2018, July 14). The Ideal Features of an Ideal Market Economy . https://ivypanda.com/essays/market-economy/

Work Cited

"The Ideal Features of an Ideal Market Economy ." IvyPanda, 14 July 2018, ivypanda.com/essays/market-economy/.

References

IvyPanda. (2018) 'The Ideal Features of an Ideal Market Economy '. 14 July.

References

IvyPanda. 2018. "The Ideal Features of an Ideal Market Economy ." July 14, 2018. https://ivypanda.com/essays/market-economy/.

1. IvyPanda. "The Ideal Features of an Ideal Market Economy ." July 14, 2018. https://ivypanda.com/essays/market-economy/.


Bibliography


IvyPanda. "The Ideal Features of an Ideal Market Economy ." July 14, 2018. https://ivypanda.com/essays/market-economy/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1