A market economic system, also known as a free market or capitalist system, is an economic system where resource allocation, production, and distribution decisions are primarily driven by market forces of supply and demand. In a market economic system, individuals and businesses are free to make their economic choices based on their self-interest. Prices, determined through market transactions, play a key role in coordinating economic activities and resource allocation. Market competition promotes efficiency, innovation, and consumer welfare. The market economic system is characterized by private ownership of resources, profit motive, voluntary exchange, and limited government intervention. Understanding the market economic system helps in analyzing market dynamics, economic incentives, and the role of individual decision-making in resource allocation.