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 about what goods and services are in demand and how they should allocate their resources. This leads to efficient allocation of resources and encourages innovation and competition. However, the presence of market failures may require government intervention to ensure stability and fairness. Also, temporary shortages and surpluses are not necessarily permanent and can be corrected through market forces. Centralized economic power is not a characteristic of a free-market economy.

In a Free- Market Economy