A pure market economy is sometimes called pure capitalism. In a pure market economy, the production and distribution of goods and services are determined by the laws of supply and demand without government intervention. This means that businesses operate in a free market where prices are set by competition and consumer preferences.
Key characteristics of a pure market economy include:
1. Private ownership of resources and means of production.
2. Freedom of choice for consumers and producers.
3. Competition among businesses to improve products and services.
4. Prices determined by supply and demand.
5. Limited government intervention in economic activities.
In contrast, other economic systems like command economies, socialism, and communism involve varying degrees of government control over the economy and resources.
