What are some reasons why a certain degree of inequality of income would be expected in a market economy?

Short Answer

Expert verified

There are certain reasons why a certain degree of

inequality of income would be expected in a market economy like

-change in technology

-value of good and services

-gender gaps and preferences

Step by step solution

01

Income inequality

Income inequality is a chief thing in managing excellent of existence, as it serves as a means to access health care, schooling, housing, and so on. profits inequality varies by social factors which includes sexual identification, gender identity, age, and race or ethnicity, main to a much broader hole among the higher and working lessons.

02

Change in technology

Change in technology affects both either skilled labor and unskilled labor,

when new technologies are introduced to a firm then, skilled labor is considered to be more efficient to deal with new technologies leads to more earnings for skilled labor, and creates inequality in earnings between skilled and unskilled labor.

03

The value of goods and services

Some certain goods & services are more important and have significant value that automatically gives them the upper hand for high earnings as compared to other goods & services that crates inequality in income.

04

Gender gaps and preferences

There are women doesn't want to marry that gives more working hours as compared to men & sometimes women are paid less in comparison to men with doing equal working hours that creating a certain kind of inequality in income between the genders.

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