How Freely Operating Market System

Product market is a mechanism that allows people to easily buy and sell products. The interaction between product and factor markets involves the principle of derived demand. Derived demand refers to the demand for productive resources, which is derived from the demand for final goods and services or output. Firms obtain the inputs or factors of production in the factors markets. The goods are sold in the products markets. In most respects these markets are the same. Price is determined by the interaction of supply and demand, firm's attempt to maximize profits, factors can influence and change the equilibrium price and quantities bought and sold and the laws of supply and demand hold. Consumers (households), in pursuit of their self-interest, have the incentive to look for lower prices. An incentive is the hope of reward or fear of punishment that encourages a person to behave in a certain way. Free market offer a wider variety of goods and services, and consumers in essence decide what gets produced which is called consumer sovereignty.

The Free Enterprise system is a type of economy where products, prices, and services are determined by the market instead of being determined the government. Free enterprise refers to an economy where a businesses is free from the government’s control. There are five main principles of the Free Enterprise System. These five parts are, the freedom to choose our businesses, the right to private property, the profit motive, competition, and consumer sovereignty.

A market is one of the many varieties of institutions, systems, social relations, procedures, and infrastructures whereby parties engage in exchange. There are different types of markets

The term market is used to describe the process that allows buyers and seller of a good or service to interact to facilitate an exchange for money. The markets are powerful tool they provide resources that allow sellers to to optimize their production systems to make the maximum profits, and this allows the buyers buy good and service in the least amount of money possible to the quality of good and service they want. Due to this, markets are the most efficient allocation of resources in the economy.

In a mixed market economy the producers and consumers decide on the three basic questions in economics. The questions are what, how, and for whom to produce. Supply and demand answers the questions. The consumers wants determines what is produce. The producers determine how to produce it by figuring out the most efficient way to make what the consumers want. For whom to produce it for is the consumers and whoever is willing to pay for the product. (Economics pgs 6-7)

A capitalist economy operates in a “free market”, this is a requirement vital if capitalism is to thrive. A free market is characterized by

In this type of market structure there are many buyers and sellers, and the organization can easily enter and exit the market. Instead prices are determined by market supply and demand. Also, in this type of market, businesses can’t control prices hence the output of the business is controlled deeply in a frame to make profit. Last but not least, in the perfect competition market, consumers are expected to receive goods at a much lower price than in any other market

"Market refers to an arrangement, whereby buyers and sellers come in contact with each other directly or indirectly, to buy or sell goods."

The market economy system is the economy system that least control by the government. Under this economy, people can have private property. All of the investment are decide by the people; but not government. Production and the Sales are control by the firm or the company. The Company can sale what they want to sale, produce what they want to produce. Government will not meddle in your choice. You can choose the job that suitable to you without government’s permission. As you are the consumer or the supplier, you are free to make demand decisions and the supply decisions. Because of this, prices are affected by demand and supply decisions through the price mechanism. When the

In a market economy, prices are determined by the interaction of demand and supply in the marketplace. Economic

Market Structures are determined by the types of firms that are in them. Different firms have different characteristics that make them ideal for different structures. Several factors come into play n determining which market structure a firm belongs to; a firm without competition and can determine prices and output is automatically in the monopoly market structure. Smaller, multiple and similar firms are in a perfectly competitive market and so on. Different market structures employ different pricing strategies. These market structures and their ideal pricing strategies are described below.

In addition to the level of development of the economy, countries are often classified as free market, where business activities are intervened minimally by the government; or centrally planned, where the government determines prices and production based on desired levels of supply and forecasts of demand.

In monopoly, the producer fixes a high price for his product. In other market situations like oligopoly and monopolistic competition, the individual producers take the prices of the rival products in determining their price. If the primary determinant of price changes in the competitive condition is the market place, the pricing policy can least be categorized as competition based pricing.

Market: A market is any one of a variety of different systems, institutions, procedures, social relations and infrastructures whereby businesses sell their goods, services and labor to people in exchange for money. Goods and services are sold using a legal tender such as fiat money. This activity forms part of the economy. It is an arrangement that allows buyers and sellers to exchange items. Competition is essential in markets, and separates market from trade. Two persons may trade, but it takes at least three persons to have a market, so that there is competition on at least one of its two sides. Markets vary in size, range, geographic scale, location, types and variety of human communities, as well

The term market has been interpreted in Economics as the place where both the buyers as well as the sellers meet and they buy and or sell goods.