The main mechanism that regulates the market system is

The main mechanism that regulates the market system is the government. It is because they are the one that sets up and regulates the system and allows the mechanism of the system to continue as the government is the one that enforces and controls the demand and supply in the market system.

The main mechanism that regulates the market system is the government. In the market system, the buyers, vendors, and other parties are involved to trade in any product or service. Here, the government not only establishes but also regulates and enables the mechanism. It is because the government enforces and controls the demand and supply activities in the market system. However, how well respondents get funding, start companies, and embrace fresh techniques and best practices rely on the strength of a market system.

Further Explanation:

While the government enforces and controls the market system, business owners have to understand that there are a variety of different market systems that exist. It depends on the industry to adopt a market system when making or determining whether a specific sector should enter or leave, manufacturing choices, and pricing decisions. There are five major market system types that every business owner should understand, they are:

•A monopoly is a single producer and usually no sensible replacement for a specific good or service.

•Oligopoly is that there are a few producers who are the dominant part of the output on the market.

•Monopolistic Competition is that every competitor is adequately different from the other, with some charging higher rates than a competitive company.

•Monopsony, it has only one buyer. This market system gives considerable strength in determining the cost of the products manufactured for specific goods or services.

•Perfect Competition is a market system with many distinct buyers and vendors.

Learn more

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

•What is market economy? -  

•Which statement is true about the relationship between a monopoly and it’s competition in a market? -  

Keyword: Market system, regulation of market system, types of market system

Subject: Business

Class: 10 – 12

Sub-chapter: Marketing

explanation:

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