The market economy is delivering miracles by the minute and yet we hardly notice or care; worse, we denounce the realization of this dream of all of history, this coming of heaven on earth and call it decadent and dangerous.In a market economy, the market forces of demand and supply determine the production of any entity. The goods that are in demand are produced more. The factors of production can be employed by a private entrepreneur. Everybody has a freedom to choose their own way to utilize the resources, and accordingly, produce goods in any field of their choice. Since demand and supply influence economic decisions, consumer is the king in a market economy.
― Jeffrey Tucker, It's a Jetsons World: Private Miracles and Public Crimes
Consumers' preferences are the ruling policy in a market economy. Goods that have higher demand will have higher prices. However, a shift in demand will immediately impact the price of the product. The question of scarcity is answered by market forces. Individuals can own property, sell it, or pass it to the successors. This is no restriction on the amount of assets one can acquire, given that the individual possesses the purchasing capacity.
Examples of Market Economy
There is no country which has complete market economy in the true sense. Government intervention, to some extent, is always present, though in varying proportions, especially in case of manufacturing of public goods. This is done to ensure that supply of necessity goods are not concentrated in the hands of a select few. Hong Kong, Singapore, Australia, United States, Switzerland, Denmark, are a few examples of nations that have a predominantly market economy.
While it is difficult to come to a consensus, there is no economic system that can be said is a fool-proof method to answer the question of scarcity in the most effective way. Like Charles Wheelan, (Naked Economics: Undressing the Dismal Science) has stated, A market economy is to economics what democracy is to government: a decent, if flawed, choice among many bad alternatives. Many traditional economists are wary of letting privatization seep in the economy. But, that cannot erase the positive effects of market economy that are visible throughout the world.