ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A market economy is an economy based on capitalism, where goods and services are freely exchanged on an open market. The value of the outputs, most often characterized in terms of a price, is determined solely by market interaction between producers and consumers, a concept known as voluntary exchange.

Detailed explanation-2: -Pillars of capitalism In free markets, also called laissez-faire economies, markets operate with little or no regulation.

Detailed explanation-3: -Market economies may still engage in some government interventions, such as price-fixing, licensing, quotas, and industrial subsidies. Most commonly, market economies feature government production of public goods, often as a government monopoly.

Detailed explanation-4: -A free market economy is one without government intervention or regulation.