A market economy is a system in which economic decisions are made primarily by consumers and businesses. This type of economy promotes efficiency by allowing the free interplay of supply and demand. Because consumers are willing to pay the most for things, businesses will only create things that will return the highest profit. Competition also breeds efficiency. The most efficient companies earn more than those that produce less. Which of the following is not a characteristic of a market economy?
In a market economy, there are two main types of markets: the standard market system and the monopolistic one. The standard market system is a tightly held economy, and a command economy is an exception. In a standard market system, goods are regulated by government. The government has a hand in the market, but the economy is still tightly held. This means that prices may be very different in a market economy expotab.
In a market economy, the people participate in the decision-making process in an effort to obtain the best possible price. As a result, the poor have fewer resources and end up being poorer. Likewise, some services cannot keep their prices low and are therefore controlled by the government. This happens because the service benefits society as a whole. However, critics of market economies argue that greed is the driving principle of the system. The marketplace is not free of government intervention, but it should be.
