In a free- market economy,

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In a free-market economy, the existence of profits and losses provide signals to other economic agents. This means that businesses that are successful and profitable will expand, while those that are not will fail. This creates a self-regulating system that corrects market failures and incentivizes efficiency, innovation and competition. While some government intervention may be necessary to prevent externalities or ensure fair competition, the free-market approach generally favors minimal interference from the state. However, economic power is not necessarily centralized in a free-market economy, nor do temporary shortages and surpluses become permanent.

In a Free- Market Economy