McConnell_Brue_Chapter02

McConnell_Brue_Chapter02

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Unformatted text preview: ed behaviors and their effect is our third key characteristic of market systems. Producers behave in self-interested ways. They make the choices they believe will lead to the greatest profit. Consumers also behave in self-interested ways. We make choices seeking to maximize our satisfaction. The culmination of each group behaving in such selfinterested manners constitutes the heart of a market system in that both supply and demand for goods and services emanates from these behaviors. In addition, producers and consumers behave in selfinterested ways when we are generous. When we give, we receive some internal benefit from our gifts to others. And finally, the assurance that everyone will behave in self-interested ways brings order to a process that would otherwise be very disorderly and chaotic. We have distinctly identified the importance of freedom of choice to market systems in an earlier section, but we are not quite finished with the concept just yet. The freedom of choice among producers leads to competition between them as well, and competition assures efficiency. Competition represents our f...
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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.

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