ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A market economy is a type of economic system where supply and demand regulate the economy, rather than government intervention.

Detailed explanation-2: -Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society.

Detailed explanation-3: -Advantages of a Market Economy Consumers have a wide variety of products to choose from. Innovation is encouraged because of the profit motive and self-interest of the market participants. Competition ensures better quality products, hard-working labor, and hence overall high efficiency.

Detailed explanation-4: -Increased efficiency, productivity, fair competition, and innovation are key advantages of a market economy. On the other hand, the disadvantages of a market economy are intense competition, poor working conditions, environmental degradation, and economic disparities.