The main characteristics of a market economy:
Definition of a market economy: An economic system in which economic decisions and the pricing of goods and services are guided by market forces (e.g: supply and demand) and there is little government intervention.
The resources are owned by private individuals or companies. They will use these to produce goods and services for consumers. Any profit or loss made in this process goes to the individuals who own the company. The resources are allocated by the market, this is because market prices will tell the producers what to produce, how to produce and in which quantity. Individuals also own the production units, completely contrary to the planned economy where the state owns them. Consumers have choice. This is very important because it stimulates competition among producers forcing them to produce more efficiently in order to meet the consumer’s wants. Because producers want to succeed and make profit, they have to try and maximize......

Join Now to view the rest of this term paper!
Members: Login to view this research paper.

Title: Market Economy
Approximate Word Count: 946
Approximate Pages: 4 (250 words per double-spaced page)

With the Term Papers Lab Membership Pass, you get instant access to every essay on this site, including this essay on Market Economy, for as long as you remain a member.

Other essays sites charge almost $100 for a single term paper. At Term Papers Lab, you can get instant access to over 100,000 research papers for as little as $29.95!