Examples of the Economic Systems
The definition of a market economy is an economic system based off of individual choice and voluntary exchange. Basically what this means is that it is a consumer driven market.
Advantages of the Market Economy:
- products that aren't in demand can be removed simply by the stopping of buying a certain product.
- bring together diverse groups and provides economic opportunity for them
- they renew struggling areas and somewhat promote public health
Disadvantages of the Market Economy:
- they may give false signals about side-effects of the production such as safety and pollution
- often there is a large gap between the rich and the poor income-wise
- certain industries may monopolize the system and drive up the price of the products
The market economy is by far the best option for the question of what is going to be produced in my opinion because it is basically the system of where, "if you make it and someone wants it, sell it." It is an entrepreneurs dream for an economy/market like this because it offers so much opportunity. As for how the goods are going produced it is up the manufacturer even though they need to follow the law when it comes to hiring people to produce their intended product. As for whom the goods are produced for, it is up to the producer yet again to determine the intended target audience based on what they are selling/how much they are selling it for.