Question

what is market economy

Answer 1

an economic system in which production and prices are determined by unrestricted competition between privately owned businesses is known as market economy

Answer 2

A market economy is an economic system in which the decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand. The major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.

Market economies range from minimally regulated "free market" and laissez-faire systems—where state activity is restricted to providing public goods and services and safeguarding private ownership—to interventionist forms where the government plays an active role in correcting market failures and promoting social welfare. State-directed or dirigist economies are those where the state plays a directive role in guiding the overall development of the market through industrial policies or indicative planning—which guides but does not substitute the market for economic planning—a form sometimes referred to as a mixed economy.

Market economies are contrasted with planned economies where investment and production decisions are embodied in an integrated economy-wide economic plan by a single organizational body that owns and operates the economy’s means of production

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