Moral Reflections on Economics

Serving Needs through Markets

If an economy has 10 million people, then should the food be produced and distributed to the markets for all 10 million people? Most people would answer yes. It is because food is a basic necessity and everyone should be able to fulfill basic necessity.

However, markets serve products which are demanded. Demand in market economy is a desire for products for which there is purchasing power. There can be demand for luxuries if people have the purchasing power. Suppliers in market economy will serve luxurious products if there are willing buyers who have the purchasing power and the supplier can product and supply these products profitably.

However, if there are poor people who cannot afford food to feed themselves, then they are not going to be served by the markets.   

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