7. Competition prevents companies from charging extremely high prices on the free market. This is because consumers, would prefer to buy products and services from companies that offer quality products at a fair and moderate price, if the price gets extremely high, consumers will prefer to give up quality and buy cheaper products, which would be disadvantageous for large companies.
8. Compretition makes producers invest in the quality of their products (taking into account the selling price). Higher quality products can draw more attention from consumers, in this case, competing companies try to keep their products with superior quality to each other.
9. The money spent on companies in bankruptcy, diminish the economic efficiency of a government, which could use this money to promote public works and promote guidelines that encourage companies that are active and moving the local and national economy, which is what really should interest the government.
10. Capitalism generates monopolies. This is disadvantageous because it removes the consumer's freedom of choice, in addition to allowing low quality and high price products, since there is no competition. Furthermore, capitalism generates extreme individualism, where entrepreneurs do not establish ways of helping each other, encouraging small companies to fail to establish themselves in the market.
11. There is a film called "Pirates of Silicon Valley" that shows the establishment of the companies "Apple" and "microsoft". Both must compete with a company called "IBN" that was a big name in the computer industry, even when this type of product was not as popular as it is today. The film features Steve Jobs and Bill Gates as main characters. In the film, both Apple and Microsoft became innovative companies, winning the competition against IBN and establishing themselves as the main references in the IT industry.
The thing which prevents businesses from charging extremely high prices in the free market system is:
The effect which competition between producers has on the quality and availability of goods and services is:
The downsides of the government spending money to help failing businesses is:
The two major drawbacks commonly associated with capitalism are:
A market is a place where buying and selling of goods or services takes place and in a capitalist system, profit is the main motivating factor.
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