Also known as the capitalist system or the laissez faire system. In this economy production decision are made by consumer and producers. No countries in the world has a completely free economy. There is no government control over land, labour and capital. There are many advantages and disadvantages:
The price mechanism is a process in a free economy by which prices of goods and services are determined by demand made by the consumers.
The mixed economy
have features of both the free market system and planned system. The government operates and control the public sector & the private sector ( that a part of economy controlled by private firms and individuals) is governed by the price mechanism and market forces; most modern western countries have mainly market economies.
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