Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 2 - The Market System and the Circular Flow - Questions - Page 44: 2

Answer

In a free market, there are few restrictions on entering and leaving the market. This is why it is called a free market: because people are allowed to enter and leave as they desire; the only thing controlling the market is largely the supply and demand curve, which impacts whether or not it is profitable to enter a market.

Work Step by Step

In a free market, there are few restrictions on entering and leaving the market. This is why it is called a free market: because people are allowed to enter and leave as they desire; the only thing controlling the market is largely the supply and demand curve, which impacts whether or not it is profitable to enter a market.
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