Main advantages or benefits of market economy can be highlighted as follows:
1. Increase Business Efficiency
There will be a competition among producers to produce high quality products at lower cost. So, latest technology and modern methods of production are introduced. Therefore, market economy helps to increase business efficiency.
2. Promotes Innovation
It is another notable benefit of market economy. It promotes innovation because producers wants to create new products in order to gain high profit.
3. Consumer Sovereignty
In market economy, products are produced according to the need and demand of the consumers. So, it gives emphasis on consumer sovereignty.
4. Proper Use Of Economic Resources
Economic resources are properly utilized so that maximum profit can be obtained and wastage can be minimized.
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5. Foreign Investment
Market economy helps to bring foreign investment in the country which helps in industrial and economic development of the nation.
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6. Freedom Of Choice
Consumers are free to choose and consume the products or services according to their needs, choice and income. Large variety of products are available for all types of people.
7. Fare Competition
It encourages free and fare competition among the producers.
