Market economy
Definition
A market economy is an economic system in which the production, distribution, and prices of goods and services are determined by supply and demand in a competitive market.
Analogy
Imagine a bustling marketplace where vendors set their own prices for their products based on what customers are willing to pay. The vendors compete with each other to attract buyers, creating a dynamic and ever-changing market economy.
Related terms
Industrial Revolution: A period of rapid industrialization characterized by the development of new technologies, factories, and mass production methods.
Capitalism: An economic system in which private individuals or businesses own resources and operate for profit.
Laissez-faire: An economic theory that advocates for minimal government intervention in the economy, allowing markets to function freely.
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