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Inequality in the distribution of income within the Free Market- disadvantaged groups, relative poverty.
How is the distribution of income decided in a free market economy?
Market economies provide people with income as a reward for their contribution to the production process. The owners of natural resources, capital, entrepreneurial skills, or labour which is used in the production process receive income based on the value of their input. The price that is paid for inputs determines the individuals share of total output and will generally depend on how scarce or demanded the resources that they have to offer are.
Why is there inequality in the distribution of income?
As income is d…
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