Market-based economies allow goods to flow freely through the market, according to supply and demand. The United States is considered a market economy where consumers and producers determine what’s sold and produced. Producers own what they make and decide their own prices, while consumers own what they buy and decide how much they’re willing to pay.  However, the law of supply and demand can impact prices and production. If consumer demand for a specific good increases and there's a resulting supply shortage, prices tend to rise as consumers are willing to pay more for that good. In turn, production tends to increase to satisfy the demand since produces are driven by profit. As a result, a market economy has a tendency to naturally balance itself. As the prices in one sector for an industry rise due to demand, the money, and labor necessary to fill that demand shift to those places where they're needed. Pure market economies rarely exist since there's usually some government intervention or central planning. Even the United States could be considered a mixed economy. Regulations, public education, social security benefits are provided by the government to fill in the gaps from a market economy and help to create balance. As a result, the term market economy refers to an economy that is more market-oriented in general.