Market Economy Definition Market Economy Explained Types of Market Economy

#5 – Oligopsony
Oligopsony is a market system comprising a few powerful buyers and numerous sellers. It is usually seen in markets for inputs.
#6 – Monopsony
Monopsony is a market with only one buyer and multiple sellers. The buyer controls the market and obtains products at low prices.
Examples
The following market economy examples clarify the concept and applicability of ME to a great extent.
Example #1
The best example of a global market economy is the US. The US has a free market where buyers and sellers fully control the production and pricing. As a result, the supply and demand of a product determine the companies’ investment and manufacturing decisions. Moreover, the government has minimal control over the market; thereby, the demand-supply mechanism promotes the exchange of products and services and protects consumers and sellers alike.
Example #2

ME advantages	ME disadvantages
Competition increases efficiency in manufacturing goods and delivering services	Uncertainty and risk for both businesses and individuals
Innovation thrives	Private entities struggle to provide public services
Market grows to attract foreign businesses	Disparity of income arises between rich and poor
Variety of choices available to the consumers	Essential goods may become costly
Entrepreneurship increases	Inflation may occur

Another best example is Great Britain. Great Britain was the front runner of the industrial revolution in the 19^th century. Therefore, its economy is completely driven by market forces. It is independent, highly developed, and internationally recognized for pro-market initiatives. There are no government policies affecting or controlling the market in any way. Here the buyers and sellers can make their own business decisions. The market regulations and pricing are due to the demand and supply mechanism. However, of late, politicians are pushing to steer the economy away from the free market system.
Characteristics
The following are some of the unique market economy features:

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  Private ownership of property and business
  
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  Freedom to consumers and business
  
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  Selfish motive for profit
  
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  Rivalry among businesses
  
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  Miniscule government regulation