A free market system affects supply and demand by allowing prices to be dictated by the interactions of businesses and consumers. In a free market, the laws of supply and demand govern the production of goods and services. When demand for a product or service increases, the price tends to rise. When suppliers are producing more goods and services, the price tends to fall. This dynamic encourages competition and efficiency among businesses, and it leads to a wide variety of goods and services being available to consumers.
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When any government is too involved in the free market, it becomes not so free. The government is already the taxer of the income of corporations and its individual citizens. Additionally, if they become allowed to control how businesses make their money, as well, then that would be called communism. This type of system does not work because it is not progressive enough for a growing economy. The market must be competitive for it to thrive and meet the supply of demand. But some argue that it is an unfair system, rigged only for the few to survive.