Competition represents our fourth key characteristic

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Unformatted text preview: ourth key characteristic of market systems. In the event competition were absent from our system, we would be held hostage not only to the prices producers wanted to charge, but also restricted in our choices among available alternatives, too. Learning Objective 2-2 9 Chapter 2: The Market System and The Circular Flow Slide 22 Our final key characteristic of market systems is the capacity of price in the market to automatically coordinate markets and their activities. Key Market System Characteristic #5 Markets and prices give the system the ability to coordinate millions of daily economic decisions by bringing buyers (demanders) and sellers (suppliers) into contact. • The self-interested actions taken on both sides of the market transaction bring agreement on prices and quantities provided. • Through this process the questions each economy must answer are addressed automatically. Chapter 2 We have no need for planning committees or establishing other processes to assure our markets provide a wide range of goods available for our choices. Prices in the market system...
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