Market economy what Is a Market Economy?

Capitalism 
Main article: Capitalism 
Part of a series on 
Capitalism
 
Concepts 
Economic systems 
Economic theories 
Origins 

---

Development 
People 
Related topics and criticism 
Ideologies 

 Capitalism portal 

 Business portal 

v 

t 

e 
Capitalism is an economic system where the means of production are largely or entirely privately owned and operated for a 
profit, structured on the process of capital accumulation. In general, in capitalist systems investment, distribution, income and 
prices are determined by markets, whether regulated or unregulated.
There are different variations of capitalism with different relationships to markets. In laissez-faire and free-market variations of 
capitalism, markets are utilized most extensively with minimal or no state intervention and minimal or no regulation over prices 
and the supply of goods and services. In interventionist, welfare capitalism and mixed economies, markets continue to play a 
dominant role, but they are regulated to some extent by government in order to correct market failures or to promote social 
welfare. In state capitalist systems, markets are relied upon the least, with the state relying heavily on either indicative planning 
and/or state-owned enterprises to accumulate capital.
Capitalism has been dominant in the Western world since the end of feudalism. However, it is argued that the term mixed 
economies more precisely describes most contemporary economies due to their containing both private-owned and state-owned 
enterprises. In capitalism, prices determine the demand-supply scale. Higher demand for certain goods and services lead to higher 
prices and lower demand for certain goods lead to lower prices.