Market Economy

Supply and Demand

A true free market economy has no government intervention. It allocates its scarce resources according to supply and demand. Producers produce what consumers consume. Whatever consumers "want", they will pay money for, and that's where companies provide and generate revenue. People that take part of the economy can own their own property and utilize it for resources, whether it is stores, factories, transportation, etc.


  • Open opportunity: Anybody can take part in business within the economy. They can grow and shrink with supply and demand, and contribute accordingly.
  • People work harder in business because they want to increase their standard to make money [2].
  • More innovation within the country as companies look for new products to sell.
  • Competition leads to better efficiency as their standard must beat the others.


  • Produces class division. If you look at the U.S., their is a huge income gap between the +90%, and the 1 % [1].
  • The market economy sometimes lacks moral countenance. Exploitation, coercion, and violence may ensue with competition.
  • Market economies may lead to monopolies and obligopolies. Some companies may dominate a market which would lead to more class division.


1. Thompson, Derek. "A Giant Statistical Round-Up of the Income Inequality Crisis in 16 Charts." The Atlantic. Atlantic Media Company, 12 Dec. 2012. Web. 22 Jan. 2015.

2. Ollman, Bertell. "Market Economy: Advantages and Disadvantages."Dialectical Marxism. NYU, n.d. Web. 20 Jan. 2015.

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