What is the market economy?

In some countries of the world, economies are centrally planned. This means that the country's government tells its companies and citizens who produce goods and provide services that types of things need to be provided and how much they charge for them. Other countries use what is called the market economy. This means that the decision on what goods will produce, what services they provide and how much is charged for the supply and demand on the market. These interactions take the form of what economists evoke supply and demand. In other words, manufacturers have a certain offer of goods or services and consumers have a specific level of demand or needs. The supply and demand on the market are determined by the types of things provided by manufacturers and the prices they will charge to consumers.

Manufacturers or manufacturers are generally driven by the desire to earn money by selling their product or service to consumers at a price that is higher their costs. These business owners want to charge as much money as possible to make as much money as possible but a spotOf course, the Iberors want to pay as little as possible. In general, the more the manufacturer charges for his goods or services, the fewer people want to buy it. On the other hand, manufacturers who charge less frequently have higher demand. This two -way interaction between the manufacturer's desire to sell at the highest price and the desire to buy at the lowest price forms the basis for products in the market economy. In this economic system, the prices of every price are at the point that attracts the most customers, so the total purchases give the producer the largest profit margin.

This supply and demand will determine what types of COM companies products offer in the market economy in the same way as this type of system controls prices. If there is no demand for good or service, for the price necessary for the seller to make a profit for factoring at production costs, then the manufacturer has no motivation for this item on the market. As a result, supply and demand dictate what types of goods and services are successful in the market economy.