Amadeo  1 Definition of Market Economy

• Market economy is when economic decisions are made by the free market 
• Production of goods is regulated by the laws of supply and demand
• Producers set high prices for their products that most consumers are willing to play

Amadeo     1     Market Economy Characteristics 

• A market economy is defined by six characteristics 
• Private Property is first
• Private Property-- Majority of the goods and services are owned privately 
• This allows the owners to produce legally binding contracts to buy, sell, lease or rent their property

Amadeo     1     Market Economy Characteristics

• The second Characteristic is the Freedom of Choice
• Freedom of Choice -- Owners, businesses, consumers and workers are free to produce, sell and purchase goods and services to the free market
• Meanwhile Their only constraint is the price that the conumser is willing to pay or sell for, and the amount of money they have

Amadeo     1-2     Market Economy Characteristics

• The third characteristic is Motive of Self-Interest
• Motive of Self- Interest means the market is driven by everyone trying to sell their goods or services to the highest bidder
• It is rather selfish, but the title speaks for it all 
• It works to the benefit of the economy over the long run

Amadeo     2   Market Economy Characteristics

• Characteristic number 4 is Competition
• Competition is the forces of competitive pressure keeps prices moderate, and ensure that goods and services are provided 
• This force or competitive pressure also applies to workers, whor are competing with eachpther for the highest paying jobs

Amadeo     2    Market Economy Characteristics

• Characteristic number 5 is Systems of Markets and Prices
• Systems of Markets and Prices is when the marker economy is completely dependant on an efficient market in which sell goods and services 

Amadeo     2    Market Economy Characteristics

• The sixth characteristic is Limited Government
• The niche pg government is simply to ensure that the markets are open and working meaning it is in charge of national defense so no other country can destroy the markets. 
• Limited Government values and purposes of not interfering with the market

Amadeo     2    Market Economy Characteristics

• Market economy allows the free interplay of supply and demand 
• Market ecomomy ensures the most desired goods and services prodced
• It all the causes of consumers willing to pay the highest prices for the things they want the most

Amadeo     2    Market Economy Characteristics

• Market economy is really benificial to producers becuase they work freely with the prices of their goods
• Many producers who are innovative will come up with more efficient methods of production

Amadeo     3    Market Economy Characteristics

• A market economy functions through competition, but there are many people in society who are naturally disadvantaged with because of the lack of minerals and resources
• Market economy sometimes fluctuates with the base of a traditional economy's tactics , but you cannot get this and a mixed economy confused