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Name a social problem where free markets are not allowed to function?

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Luke Wilcox answered
Free market is the term used to describe markets that have limitations on the regulations government bodies can apply. They are limited to the collection of tax and the enforcement of private ownership and contracts.

A controlled market (or regulated market) describes markets in which the government have full potential to regulate goods, services and labor prices. It also determines how they're distributed and how they can be used. These terms are theoretical, and in practice all markets have some form of combination of being both free and controlled by regulations imposed by the government bodies.

  • No markets are truly free markets
You will not be able to find any markets in existence that are completely free. There are a lot of factors that disallow the functioning of a completely free market. The first, and most important, is the need to pay taxes.

  • The need to pay taxes
Paying taxes is mandatory for all ways in which money is earned, most commonly referred to as income tax. Even if businesses are self-employed, self run and the business owner owns the premises of such a business or market, the payment of income tax to the government is a law.

Another problem that would cause free markets to not function is the monopolization of certain markets over others. Without government regulations being imposed, markets can gain dominance over their competitors; which would cause the inferior market to close or declare bankruptcy.

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