Evaluate and explain the following statements: a. The market system is a profit-and-loss system. b. Competition is the disciplinarian of the market economy.

Answer is given below :

Explanation:

There are buyers and sellers in the market. Buyers are likely to call everyone who looks appropriate, if there are only a few. Sellers want to sell products or services to get product surplus. Therefore, the whole system depends on earning profit or loss. Improve on their own in a free financial market; Suppose the consumer surplus exceeds the producer surplus, with some sellers leaving the market, thereby reducing supply and increasing priceThis reduces the surplus of additional customers.There is competition between buyers and sellers. Such competition will stabilize the market economy. Due to this competition the market has to reach equilibrium on its own; There should be no regulatory controlThe vertical axis represents the value and the horizontal axis represents the size. Suppose the market price is P1, where supply exceeds DV demand; This is a surplus sector. Some suppliers leave the market because their products are not sold; From the availability of products it reduces the supply from V to E, as well as increases the demand This creates demand‌ from D to E. Point E, the equilibrium level, is now established, where demand and supply control outweigh control; Equilibrium price p.