The market economy (free enterprise/laissez-faire)
In a market economy, productive resources are privately owned and
economic decisions are highly decentralized. Each member of the labour force chooses his job independently and each household decides what to buy with its money income. A business concern decides what to produce, what production methods to use, and where to sell the produce. In a market economy, choices are resolved by the free play of market forces of demand and supply. Resources are allocated through the price mechanism.
economic decisions are highly decentralized. Each member of the labour force chooses his job independently and each household decides what to buy with its money income. A business concern decides what to produce, what production methods to use, and where to sell the produce. In a market economy, choices are resolved by the free play of market forces of demand and supply. Resources are allocated through the price mechanism.