A free market economy is an idealized form of a market economy in which buyers and sellers are permitted to carry out transactions based solely on mutual agreement without interventionism in the form of taxes, subsidies, regulation of government provision of goods and services. In this type of economy, all decisions are made by individuals and firms. The economy is in equilibrium when income equals output equals expenditure or simply, Injections equal Leakages. On a …
showed first 75 words of 805 total

showed last 75 words of 805 total
…the demand curve; such as the price of the product and tastes and preferences. The influences of the factors affecting demand on market demand are two types; influences causing a movemnt along the demand curve and that of a shift in the position of the demand curve. Increases in supply may be caused by events such as reductions in the cost of production, the fall of the price of factors of production and government subsidies.