What are the characteristics of a market economy?

Most commonly, market economies feature government production of public goods, often as a government monopoly. But overall, market economies are characterized by decentralized economic decision-making by buyers and sellers transacting everyday business.

What is a market economy based on?

A market economy is an economic system where two forces, known as supply and demand, direct the production of goods and services. Market economies are not controlled by a central authority (like a government) and are instead based on voluntary exchange. Market economies rely on the interplay between supply and demand to function.

How do market economies work?

In a market economy, individuals control the use and price of these resources through voluntary decisions made in the marketplace. Supporters of market economies argue that these economies have led to unprecedented development and growth. Critics say market economies can disenfranchise vulnerable groups and lead to inequality