Free market economy definition. In both planned and command economies, governments have a high level of control over how wealth is produced and distributed. They create legislation around the prices of goods and services, set out employee wages and oversee how much each corporation or business can own and produce.

A market is free if people can buy and sell whatever they want without any interference from a government, and if prices are set by supply and demand. Supply is how much of a product (both goods like Pringles and services like open-heart surgery) is being sold. Demand is how much of that product is being bought.

18/06/2020 · A free market economy is one in which the operation of the economy is mostly left in private hands, with a minimum of government regulation restricting the buying and selling of goods and services. The United States has a free market economy.

In conclusion, a free market economy is an economy in which individual people and businesses make the majority of the economic decisions and usually controls most or all of the means of production through private ownership and competition. It is viewed as a contrasting system to mixed or command economies.