Market Economy

A market economy is an economic system where prices for goods and services are determined by supply and demand. Businesses decide what to produce based on consumer preferences, and consumers choose what to buy, leading to a system of voluntary exchanges. The government has a limited role, mainly to enforce laws and protect property rights. Benefits include efficiency and innovation, as competition drives improvements. However, it can also lead to inequality and market failures without proper regulation. Overall, a market economy relies on individual choice and free enterprise to allocate resources.