What Are the Advantages of a Market Economy?

Countries all across the globe follow different types of economical structures, which generally fall into one of the following categories: market, mixed, or command. Many people use the phrases "market economy" and "mixed economy" interchangeably with one another because the characteristics of both types are quite similar. When economies are compared to one another, distinct advantages of a market economy are easily seen. Two of these include the selling price of its distributed and traded goods, and its support from citizens to conserve scarce resources. For those people who prefer living in an economy in which the government plays a limited role, the advantages of a market economy are sure to satisfy.

At the turn of the 21^st century, most countries wanted the advantages of a market economy and were operated under some degree of governmental regulation. These regulations were put into place to help maintain a healthy balance of competition between businesses, thus, being one of the main reasons that this kind of economy has flourished and become so well-known. Some people refer to this economy as one where citizens are “voting with their dollars” because it is the goods they are willing to pay for that determines what manufacturers and businesses will make available.

Even though economies fluctuate on a regular basis, the advantages of a market economy help it to adapt, which enables the production of favorable pricing on goods and trades. Adaptation is easy to acquire by their businesses because they are not regulated by large amounts of government protocols when organizational change take place. Businesses are also able to keep up with the demand levels of consumers because there is a large accessibility to a variety of available goods. On a continuous basis, market economies are able to provide consumers with whichever goods and services they most demand.

Many times, an economy will collapse if its consumers do not favor its structure, but this generally does not occur in a market economy. The support of its consumers tends to be present on a high level because they can buy what they want, when they want, and in whatever amount they want. In addition, consumers who are business owners are able to produce in the same fashion that consumers can buy. Consumers and business owners alike in a market economy usually feel that they are responsible for their financial status, which also increases their support levels. This type of market is also advantageous because it operates in a manner so that it can use its plentiful resources before using scarce ones.