Which type of economy is primarily characterized by private ownership and market-driven decisions?

A market economy is defined by its primary characteristic of private ownership and decisions that are largely driven by market forces such as supply and demand. In this type of economy, individuals and businesses operate with a high degree of freedom to produce, sell, and distribute goods and services. The prices of these goods and services are determined through interactions in the marketplace rather than through centralized planning or government control.

In a market economy, competition among businesses encourages innovation and efficiency, allowing consumers to have a variety of choices, which can lead to improved quality and lower prices. The voluntary exchange of goods and services fosters an environment in which resources can be allocated efficiently, based on consumer preferences.

Contrastingly, a socialist economy typically emphasizes collective or governmental ownership and planning, while a planned economy is centrally controlled by the government, which dictates what, how, and for whom goods are produced. A mixed economy, while containing elements of both market and planned economies, does not primarily rely on private ownership and market-driven decisions to the extent that a market economy does.