Market Economy - Explained
What is a Market Economy?
Written by Jason Gordon
Updated at November 7th, 2023
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What is a Market Economy?
A market economy is an economic system driven by the decisions of individuals or businesses within the economy to purchase goods or services.
A market is made up of buyers and sellers of goods or services.
Who Provides the Means of Production a Market Economy?
Private firms or individuals provide the means of production and the supply of goods and services.
What Causes Demand in a Market Economy?
Demand is based upon individual consumption and the ability to purchase the goods or services (income).
How is Income Earned in a Market Economy?
Income is based upon the ability to translate resources into items of value to transfer to others in the market.
Related Topics
- Economics
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- Division of Labor
- Microeconomics
- Macroeconomics
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- Command Economy
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- Market Economy
- Free Market Economy
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- Capitalism
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