What is a market economy?

Market economy refers to the economic form of allocating social resources through the market. Simply put, the market is a place or contact point for the exchange of goods or services. The market can be tangible or intangible.

The parties engaged in various trading activities in the market are called market subjects. Market participants participate in market economic activities as buyers and sellers. There is not only the relationship between buyers and sellers, but also the relationship between buyers and sellers.

Regardless of the role of the government, there are two departments in the market economy system, one is the public and the other is the enterprise.

The relationship between these two departments can explain the general principle of market supply and demand.