In a consumers decide which they want and businesses provide them. Almost all the businesses in the market economy are owned. There is sovereignty. Wide varieties of goods are produced and there is freedom of choice. are controlled through the price mechanism. In other words, prices of goods and services are determined by their and . Most of the factors of i.e. land, labour, capital are privately owned.
The main advantages of Market economy include- Encouragement to to come up with new ideas. Competition between businesses encourages greater and better utilisation of scarce . On the other hand, if there is no profit businesses will not provide goods and services. can be created which might control the prices in the market.