Content and main features of a market economy Plan: introduction

Figure 2. General model of interaction of market economic entities
The regulatory mechanism of any market economy consists of four main components: price, supply and demand, and competition.
The price ratio fluctuates, so the price serves as a guide for the producer in determining the need for a change in production volume. Changes in supply and demand and changes in the competitive environment, in turn, lead to changes in prices.
Important and common features of a market economy are:
- the existence of different forms of ownership and the predominance of private property;
- Entrepreneurship and freedom of choice;
- the existence of competition;
- limited state intervention in the economy;
- resilience of enterprises and firms to changes in internal and external conditions.
These features of a market economy are common to all its stages. But when it comes to the content and characteristics of a market economy, it is important to be able to distinguish between the two types of economies that have existed in history. Its first appearance took a long time and lasted in the developed countries of the West until the end of the XIX century.
The second type of market economy, now called the advanced market economy, has been in place since the late 19th and early 20th centuries. Its main features are:
a) economic and business activities based on various forms of ownership, ie private, state, public, mixed and other forms of ownership;
b) a high degree of generalization of capital and production, with part of the property being paid for by large monopolies and the state, and nationalized at the national and international levels;
c) active participation of the state in the regulation of the economy. In this case, the state, taking into account the development of science and technology and other factors, is responsible for determining various economic measures, development prospects, measures to regulate the relationship between different industries and sectors;
d) increasing the use of planning in the management of farms (business plan, management through the marketing system);
e) increased social protection. This includes the creation of various social security and social insurance funds owned by the state, communities and individuals.