Disadvantages:

(i)Emmergence of Monopoly: cut - throat competition may force small firms who could not cope to shut down while the big firms may merge and monopolise the market charging exhorbitant prices.

(ii)Inequality problem is worsened: the rich who own resources and control production are favoured while the poor become more impoverished.

(iii)Innefficient production: more resources are allocated to the production of frivolous goods that are desired by the rich who have the means while the basic necessities required by the poor are in short supply.

(iv)Economic depression and unemployment: excessive competition and unplanned production leads to excess supply, low price level and cut in the number of workers employed.