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In a market economy (free-market economy), production, distribution, and exchange are run by private individual firms trying to make profit out of it.
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In a market economy (free-market economy), production, distribution, and exchange are run by private individual firms trying to make profit out of it. The prices of goods and products are altered by supply and demand. Supply and demand works by the sellers determine the supply. The buyers/consumer determines the demand. In a free competitive market, the price of the product is moved up or down until the amount supplied equals the amount demanded. An example is, if more consumers demand for a certain product, the firms producing the product will increase the price in order to make more profit from it. If the demand for a certain product is decreased, the price would also decrease so that it would still attract customers. In the market economy, the government does little help but provides the country with public goods such as defense, police, street lights, roads, clean environment etc. etc. ...
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