![]() ![]() This can lead to product development and more choice of goods. Therefore, they will not be stagnant but invest in new products which may be popular with consumers. ![]() Capitalism has a dynamic where entrepreneurs and firms are seeking to create and develop profitable products. less willing to get rid of surplus workers and fewer incentives to try new innovative working practices.) State-owned firms often tend to be more inefficient (e.g. These incentives create the pressures to cut costs and avoid waste. ![]() Firms in a capitalist based society face incentives to be efficient and produce goods which are in demand. If governments own the means of production and set prices, it invariably leads to a powerful state and creates a large bureaucracy which may extend into other areas of life.
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