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The market system is characterized by the
private ownership of resources and the use of
markets and prices to coordinate and direct
economic activity. The core motivator within the market system is selfinterested behavior. All parties in the system are free
to make choices perceived to be in their own best
interest. The process is self-sustaining (almost always)
by individuals acting in their own self-interest. Chapter 2 8 Learning Objective 2-2 Slide
9 How does a market system differ
from a command system?
Market systems allow for private ownership of
• Communication to answer the questions about
production (what to produce, what to use to
produce it, and who gets it) is facilitated through
price in the market.
• Competition and the potential for profit provide
very efficient processes to facilitate the functions
of market systems automatically.
Chapter 2 Learning Objective 2-2 9 Market systems and command systems differ in both
the way resources are allocated, and also how
decisions are made regarding distribution of the goods.
The market process a...
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This note was uploaded on 09/10/2009 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.
- Spring '09