Question

The market forces such as demand, supply, competitive pricing and so on fail to incentivize the reduction of which cost?

In a free market, market forces include demand, supply, competitive pricing, and so on. These forces do not incentivize a reduction of_______costs.​

Answer 1

external environmental

Answer 2

Production costs.

Step-by-step explanation:

The market forces fail to incentivize a reduction in costs of production and this is because production cost.

This is because in a market with demand, supply and competitive pricing, it is not ideal for production costs to be reduced, rather it is advantageous if the costs are increased, in order to scale up production.

An increase in the level of output will therefore serve the purpose of competitive pricing, because manufacturer can now afford to reduce the price of commodities in order to increase sales.