Free Market Principles

Definition

These principles refer to an economic system where prices for goods and services are self-regulated by buyers' demand and sellers' supply. The government does not intervene in pricing decisions or business operations.

Related terms

Supply & Demand: Economic model that determines price levels in a market depending on availability (supply) versus desire for purchase (demand).

Competition: The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix.

Consumer Sovereignty: A characteristic of a market economy that gives ultimate power over what is produced to consumers.