Which of the following best describes a "market economy"?

A market economy is characterized by the production of goods and services driven primarily by consumer demand. In such an economy, the prices of products are determined through the interactions of supply and demand in a competitive marketplace. This means that when consumers express their preferences for certain goods or services, producers respond by supplying those goods or services to meet demand, which can lead to innovation and efficiency in production.

Limited regulation in a market economy allows for flexibility and adaptability as businesses respond to changes in consumer preferences and market conditions. Profit motives encourage businesses to seek out new opportunities and better satisfy consumer needs, leading to increased variety and improved quality of products.

In contrast, systems where the government controls production and pricing do not fit the definition of a market economy, as they inhibit the free interaction of supply and demand. Similarly, a barter system lacks the monetary framework that facilitates efficient exchanges, and an equitable distribution approach may prioritize fairness over the profit-driven aspect intrinsic to market economies. Thus, the essence of a market economy lies in its reliance on consumer demand to guide production with limited intervention.