What Is a Pure Market System of Economics?

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In the academic discipline of economics, there are two theoretical extremes of economic systems: pure market and pure command. They are theoretical because there are and have never been any real-world examples of either type of economic system.

Who Produces

Individuals or groups of individuals choose who will work to produce goods in a pure market system. There is no government interference such as equal employment laws, anti-discrimination laws or affirmative action.

What Is Produced

In a pure market system, individuals or groups of individuals choose themselves what they wish to produce. Governments do not interfere in such forms as anti-trust or anti-monopoly laws.

How Much Is Produced

Once an individual or groups of individuals decide what to goods to produce, they also decide how much to produce and at what rate. There is no government subsidization or decreed maximum/minimum levels of production.

How Much Produced Goods Cost

After goods are produced, entities that produced them choose how much they will cost and generally try to earn as much money for the goods as possible. There are no government regulations on charging too much or too little, no taxes and no tariffs.

Who Receives Produced Goods

After goods are produced, they are sold to the highest bidder, aka highest paying consumer without any government interference. Consumers generally try to get goods for the lowest price possible. In a pure market system, the equilibrium prices of goods are the results of compromises between goods producers and consumers.


About the Author

Alex Moyher has been writing professionally since 2008. He has writing expertise on topics of motorcycle safety and operation, gaming, consumer electronics, administrative office experience, college life and social networking, and has work published on eHow. He holds a Bachelor of Arts in international affairs from the University of Georgia.

Photo Credits

  • Economic crisis image by Denis Ivatin from Fotolia.com