turumajandust

Turu majandust, often translated as market economy, is an economic system characterized by the decentralized decision-making of individual consumers and producers. In this system, the allocation of resources, production of goods and services, and prices are primarily determined by the forces of supply and demand operating within markets. Private ownership of the means of production is a fundamental feature, allowing individuals and firms to control and utilize resources for their own benefit. Competition among businesses is encouraged, driving efficiency and innovation. Consumers, through their purchasing decisions, signal their preferences and needs to producers, influencing what is produced. While governments in market economies typically play a role in establishing and enforcing property rights, ensuring a stable legal framework, and sometimes intervening to address market failures or provide public goods, the core of economic activity is driven by voluntary exchange. This contrasts with command economies, where central authorities dictate economic decisions. The effectiveness of a market economy is often debated, with proponents highlighting its potential for wealth creation and individual freedom, while critics point to issues such as income inequality and potential for market instability.