Final answer:
A free market economy is an economic system in which prices of products are determined by buyers and sellers. It is a capitalist economy that relies on market forces to guide economic activities.
Step-by-step explanation:
A free market economy is an economic system in which the determination of prices of products is left to the interactions between buyers and sellers. It is characterized by private ownership of resources and businesses, and individuals have the freedom to make economic decisions based on their self-interest.
In a free market economy, buyers and sellers negotiate prices through supply and demand. The prices are determined by factors such as scarcity, competition, and consumer preferences.
Unlike a socialist economy, where the government has control over the means of production and distribution, a free market economy is a capitalist economy that relies on market forces to guide economic activities.
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