What is Market Economy?
Examples Of Market Economy?
Advantages & Disadvantages
(1) The market gives producers an incentive to produce goods that consumers want.
(2) The market provides an incentive to acquire useful skills.
(3) The price system encourages producers and consumers to conserve scarce resources.
(1) A private market economy may be quite unstable (unemployment, inflation, growth).
(2) Business may simply satisfy the wants they have created through advertising.
(3) Prices may give false or inadequate signals to producers and consumers (externalities, like pollution).