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Market economies work on the assumption that market forces, such as supply and demand, are the best determinants of what is right for a nation's well being.
Although decisions about resource allocation are made by innumerable, independent producers and consumers, the whole thing is coordinated by the market mechanism. (Geographic Dictionary) These economies rarely engage in government interventions such as price fixing, license quotas and industry subsidizations.
While most developed nations today could be classified as having mixed economies, they are often said to have market economies because they allow market forces to drive most of their activities, typically engaging in government intervention only to the extent that it is needed to provide stability...
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