Final answer:
A free market economy is an economic system based on supply and demand with minimal government intervention, characterized by economic freedom, capitalism, and laissez-faire principles.
Step-by-step explanation:
A free market economy is an economic system where the prices of goods and services are determined by the forces of supply and demand, without any government intervention.
In such an economy, economic freedom is paramount, allowing individuals to pursue their interests through voluntary exchange and private ownership of property.
This economic freedom ensures that consumers and producers can negotiate the price and quantity of goods and services in the marketplace, with competition among producers helping to keep prices down.
This economic system is closely associated with the concept of capitalism, which is characterized by private ownership, economic freedom, competition, and voluntary exchange.
It is also tied to the notion of laissez-faire, a policy that promotes minimal government interference in the economy.
While a pure market economy theoretically operates without government intervention, in practice, governments set the legal frameworks that enable markets to function efficiently and fairly.