Final answer:
A free market system has merits such as competition, individual freedom, and choice, but also demerits including income inequality, market failure, and neglect of public goods.
Step-by-step explanation:
The Merits and Demerits of Free Market
In a free market system, there are several merits and demerits to consider. One of the primary merits is that it promotes competition, which can lead to innovation and efficiency. Additionally, a free market allows for individual freedom and choice, as individuals can decide what goods and services to produce or consume.
However, there are also demerits of a free market. One potential disadvantage is income inequality, as the market may not distribute wealth equally. Another drawback is the possibility of market failure, where the market does not efficiently allocate resources, potentially leading to negative externalities and monopolies. Lastly, a free market may neglect public goods and services that are necessary for the overall well-being of society.
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