Reprinted with the permission of Ryan Myer
Which Characteristics of A Free Market Economy Are the Most Important To the
Canadian Economy?
Many free market characteristics are important to the Canadian economy. First, competition
has an important role in our economy, without it there would be no incentive to work hard or be
innovative. Second, economic freedom enables individuals to act on their own behalf and make
decisions regarding their own self interest. Finally, producers determine what and how much to
produce to meet consumer demand for goods, which is known as supply and demand. These are just
a few free market characteristics that the government implements to promote economic prosperity
and greater equality of opportunity amongst citizens.
Competition is essential to the Canadian economy. It is an incentive to inspire producers to be
more creative in order to make new and improved merchandise for other consumers. These new
products can improve a consumer’s quality of life by making their tasks easier to fulfill. With
competition, consumers have access to high quality goods at a very low price, because each
company is competing to sell their product and make money. When companies compete with each
other, the best quality of products is made because of the company’s profit incentive. In all,
competition creates a higher quality of life and standard of living because individuals are enabled to
purchase the best products that their money can buy.
Economic Freedom enables citizens to pursue any of their economic interests. Citizens may
buy, sell, or even produce goods due to this freedom. It also gives citizens the right to pursue any
career of their choice. They could help save citizens’ lives as a doctor, ensure their safety as a police
officer, or provide people with goods and services by running a business. Every individual is unique
and has their own interests to pursue. Due to these interests, there is a cornucopia of goods and
services that an individual may use or provide for others because of economic freedom.
Supply and demand contributes largely to regulating the economy. With high demand and a
low supply of a product, the price of the product increases. Therefore, when the demand is low and
the supply is high the prices fall. When the demand is equivalent to the supply, the prices tend to be
fair. When an economy becomes more prosperous, the prices of goods raise in order to help people
save their money. When the economy becomes poor, the goods and services become cheaper as an
attempt made by producers to entice consumers to spend their money in order to help rejuvenate the
economy. Producers and governments attempt this in order to keep the economy balanced and not in
a period of inflation or recession.
In conclusion, these three aspects of a free market economy are essential to the Canadian
economy. These aspects are essential because they help to maintain a healthy economy by creating
a high standard of living and quality of life for the Canadian population. These characteristics provide
greater equality and economic prosperity for Canada.