ADVANTAGES & DISADVANTAGES  OF CAPITALISM:

The advantages are:

 1. Choice 

                 - Individuals choose the type of products to consume and this choice brings more competition and better products in the market.

 2. Efficiency

                   - Goods and services produced by observing the market demand create incentives to lower costs and avoid waste. The efficiency production of goods enables the producers to supply good at lower rates to the consumers.

 3. Growth 

                 - Capitalism increases the Gross Domestic Product (GDP) that improves living standards. The overall economy gains more by the expansion and starting of new business.

 4. Motivation : 

Entrepreneurs are more motivated to produce more as the ownership of resources is held by them All the profits belong to the owners so they work hard to produce good quality products.

 5. Innovation :

 The competition in the markets in capitalism encourages businesses to produce the new product ensuring the better quality for the consumers. 

The disadvantages are:

 1. Monopolies

                     - Firms with monopoly power ( when a particular person or enterprise is the only supplier of a specific  commodity in the market) can abuse their position by imposing higher prices.

 2. Inequality

                      - A capitalist society is based inherently on the right to pass wealth down to future generations. If a group of people hold all the wealth and that wealth continues to be passed down to the same group of people, inequality and social division can occur.

 3.Recession and unemployment 

                       - An economy based on the capitalism invariably going to experience growth and decline.  This decline is inherent in the nature of capitalism.

 4. Advertisement:

 The needs and wants for a product created in the minds of people through advertisement affecting their  independence ability to think on what is better for them.

 5. Human Values :

 The capitalism places more trust on the profits and business growth than on preserving the human values.