How does a free market benefit the consumers?

The market is filled with thousands of individual entrepreneurs who face not only millions of consumers who compare quality and prices, but also each other. If a particular product sells well and quickly, other manufacturers will produce it, increasing the supply and thus bringing the supply down. The system is supposed to be both sensitive to consumer demand as well as entirely open, allowing for the entry of new competitors and the exit of unsuccessful ones. Prices faithfully register the volume of demand and supply adjusted to it.

Ideally, it is a system that benefits the consumer since prices cannot be fixed, the volume of production cannot be controlled, and competition makes monopolies or cartels impossible. The producers also gain as they depend on the same law of supply and demand in settling the wages to be paid, and in setting the prices of new products. The system provides the best mechanism both for production and the satisfaction of wants.

Source: Liberalism – a primer BY JULIO C. TEEHANKEE, Ph.D. 2005