Does free agency increase competitive balance? Why or why not? Explain using economic concepts.

Yes, the free agency increases the competitive balance by creating a great deal of flexibility, especially in the movement of employees.

The free agency is where a person is not bound by any contract in an economic role. In this case, the free agent has no legal obligations and is not bound by them. The free agency is often identified in the informal agreement between the principal and the agent to be represented when the employee works on a part-time basis or is more common in soccer when the player is free and out of the contract.

The free-agent ensures that the various cost, legal and financial constraints are eliminated in the economic outfit. This is because most of the time employees are paid on a variable basis rather than on a permanent basis. In such a case, the various business enterprises, the transactions take place more freely. The presence of a free agent makes business transactions easier and easier to carry out. This creates a competitive balance in the economy.

This is because the competitive market balance is always limited by the financial and legal terms that the free agent does not have. The competitive balance of the different companies in the sector will be enhanced when the free agency is incorporated. As a result, the employees of the different companies will be free to work for other firms creating flexibility.