Question

Which type of market typically produces the highest level of output at the lowest price to consumers?

Answer 1

Free market economy is the correct answer.

Step-by-step explanation:

The economic system in which the prices of goods and services are determined by the consumers and open market and the government or any other authority doesn't intervene in the forces of demand and supply. The government also doesn't provide any economic privilege. It is different from a regulated market as in the regulated market the government intervenes in demand and supply through tariffs for protecting the local economy and market. The free market is also associated with capitalism.

It is in the free market economy that maximum goods are produced at lower prices, the competition in a free market economy is the key factor in maximum production at minimum prices because competition leads to the effective methods of production and the effective methods leads to more profit.

Answer 2

A free market economy usually produces the highest level of output at the lowest price to consumers.

A free market economy is one in which private businesses compete for consumers. The goal of these private businesses is to make goods as efficiently as possible in order to keep their costs down. If they are able to keep costs down, this allows them to charge less for a product. If they are able to charge a small amount for a product, more consumers are likely to buy them.

This is why a free market economy usually results in a mass amount of goods and lower prices, as businesses must be effective and efficient when producing goods. Otherwise, they will not be competitive with other businesses.