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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
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)
• 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
Prices in the market system...
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- Spring '09