Question

When things are sold, it encourages production and new opportunities are created for
people to earn.​

Answer 1

There are four types of economies:

traditional, command, market, and mixed (a combination of a market economy and a planned economy). A market economy, also known as a free market or free enterprise economy, is a system in which economic decisions, such as the prices of goods and services, are determined by supply and demand. Command economies, on the other hand, utilize central planning by a central authority to make all economic decisions.

KEY TAKEAWAYS

A market economy is an economy in which supply and demand drive economic decisions, such as the production of goods and services, investments, pricing, and distribution.

A market economy promotes free competition among market participants.

Notable benefits of a market economy are increased efficiency, production, and innovation.