Advantages of a market economy. Canada Mixed Economy. What is a description and basic principles of the market economy, and a few pros and cons please? Basic description: Market economy is about having perfect competition and efficiency where supply exactly meets demand in a free market.
Equilibrium is the desired outcome in a free-market where demand exactly equals supply, so everyone who desires one good has it all just supplied by the producers of that good, everyone is thus happy. The free market allows such efficient demand/.supply of goods through the price system. WHereby consumers indicate their desire for goods by the price they are willing to pay. Principles of Economics/Economic Systems. Economics deals with the fundamental questions of why people produce, what they produce, and how much they produce.
While one economy may depend on rice, another may need wheat to sustain its economy. Since goods do not stay in the possession of one person but are constantly created and consumed, the system by which goods move is very important to all consumers. There are two extremes of economic systems: Planned Economies and Market Economies. Although a topic in macroeconomics, a quick overview of these two terms is helpful in understanding the bigger picture behind microeconomics. Canada ecenomics. What a market economy is. Supply and demand in a market economy.
Economic Systems.