Market Economy - Explained
What is a Market Economy?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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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.
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