In a free market, the price for a commodity, or service is determined by the equilibrium of Demand and Supply. The point at which the level of Demand, meets the Supply, is called an equilibrium price.
A free market economy is an economic system where the private sector individuals or businesses decide on; what to produce, how to produce and for whom to produce. Therefore the prices in this economy are set by the private sector.
7.2m questions
9.7m answers