Market economy

It is an economic system, also called the free market economy, which implements economic decisions that contribute to the definition of production resources, consumption, the nature of competition between enterprises and the price levels, by relying on the implementation of a set of procedures for enterprises and individuals; [1] The market economy is defined as the economic system that is concerned with tracking prices and production in a market by studying competition between enterprises within the private sector. [2] Other definitions of market economy are the economic sector, (E) services and commodities, and contributes to determining the nature of supply and demand in the economic environment of a particular market. [3] Characteristics of a market economy A market economy is characterized by a set of characteristics: [4] Private Property: ; Most services and products are owned by the private sector; this helps landlords and business owners to contract legal contracts for leasing, selling or buying; that is, the assets owned by individuals give them the right to receive profits based on their ownership. Freedom of Choice: Freedom of choice for owners and owners of companies to produce products and services, and then to sell or purchase them within the competition market. But this freedom is controlled by the nature of the price of buying or selling products and services, and the amount of private capital Each company owner. Motive of Self-Interest is one of the basic characteristics of a market economy. Companies seek to sell their products by placing them on the market. Often, the sale is executed after negotiations are conducted in which individuals seek products at the lowest possible prices. , But sold by the owners of companies to the highest price is subtracted, and the system of negotiations and auctions contribute to the benefits of the economic system; helps to determine the prices of services and goods within the market, and gives a realistic picture of the nature of demand and supply at any time. Competition is the emergence of a challenge between low prices within the market. Competition contributes to ensuring the provision of efficient services and goods. The increased demand for these products increases their prices based on the demand law. This motivates competitors to increase their profits; While maintaining production that leads to the addition of these products for display, resulting in a drop in prices that contributes to the survival of the best competitors in the market. System of Markets and Prices is a characteristic of a market economy. It depends on a market system that helps producers, sellers, and consumers get similar information about the products and services that are available in the market. Limited Role of Government: There is no direct economic impact of the government in the market sector of the market economy, but governments are keen to implement their role by providing protection and protection to these markets and ensuring that all investors and private business owners have equal opportunities to work In the market. The benefits of a market economy The market economy is characterized by providing a range of benefits to diverse business sectors. The most important of these are: [5] Increasing the efficiency of the market: The development of the market based on competition among the various companies. Each company seeks to provide all the necessary things that contribute to enhancing its competitiveness With other similar companies in the field of work. The emergence of many innovations: are important benefits of the market economy; companies are interested in innovation so be careful to always search for new products; to sell them in the best and least expensive. Attracting foreign investment: The role of a market economy in providing opportunities for foreign investors to participate in diversified markets, resulting in a lot of financial profits for countries that apply this economic system in their business environment. The emergence of a variety of commodities is one of the basic benefits of a market economy. It contributes to the supply of many types of consumer products that individuals can buy for their price. The disadvantages of a market economy The market economy suffers from disadvantages that affect it negatively, including: [5] Lack of investment priorities: one of the main defects of the market economy; where the financial wealth is directed to achieve the highest amount of profits, not to care about things that people really need. Non-use of industrial energy: It is a negative impact of the market economy; it leads to the spread of many unsold products, and many machines stop working, with the emergence of many of the necessary needs of individuals. The aggravation of social inequality is one of the disadvantages of a market economy. This leads to the absence of equality in social relations. The rich become wealthier, while poverty increases among the poor. The spread of economic crimes is one of the disadvantages of a market economy. It leads to the promotion of attempts by some people to obtain money illegally, especially when there are no legal means to help obtain money. The history of a market economy The history of a market economy dates back to the beginning of trade among people. Many free markets emerged as a picture of social life. Over time, the term market economy