Free-Market
Definition
A free-market refers to an economic system where prices for goods and services are determined by supply and demand without any government intervention or regulation.
Analogy
Imagine going shopping at a flea market where sellers can freely set their prices based on what buyers are willing to pay. In a free-market, just like at the flea market, prices are determined by the interaction of buyers and sellers without any external interference.
Related terms
Invisible Hand: The concept introduced by economist Adam Smith that suggests individuals pursuing their own self-interest in a free-market economy unintentionally benefit society as a whole.
Competition: The rivalry among sellers in a market to attract customers and increase sales.
Market Equilibrium: The point where the quantity demanded equals the quantity supplied, resulting in stable prices.
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