The supply of most goods can be optimized with the free market system, sure for public goods the externality problem may arise--but Coasean bargaining implies government is not the sole solution to extternalities. Actors acting in their enlightened self interest via the magic of the price system that transmit important information signals helps everyone especially the lowest lot get the maximum quality good at the lowest cost.
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If the market is completely free, then again there will be a situation with market wars. When each member of the market grows their prices for the goods. And the market will come full collapse. That's for what would not have come such a day and there is a team called the government. The government regulates that prices should be stable. The government regulates, that duties would not exceed reasonable sizes.
Regulations frequently can cause shortages. Centrally planning economic exchanges can frequently be disastrous. Sure for goods that are especially rivalrous perhaps, oil or gold where their allocations are zero sum, that we cannot effectively create fungible substitutes for market consolidation in those areas may be an issue when there is not enough feedback power of consumers in aggregate to prevent prices from rising. But most goods are not like that. We can easily create more cigarettes and liguor and beef. For most goods, except those mentioned before or ones with artificial coercion backed monopolies like patents, anyone is free to compete and create lower prices and consumers are free to boycott those who gauge anticompetitively. Perhaps in the pre-internet age the solution I am proposing would be less likely, but in the age of crowdsourcing and nearly instantaneous, nearly free global communication, consumers have more power than ever before to consume the world they want--with the socially conscious brands they support.