What is the economic system where the market determines production and pricing?

The economic system where the market determines production and pricing is known as capitalism. Under capitalism, decisions about supply and demand are made by individuals and businesses rather than by centralized government planning. This system relies heavily on free markets, competition, and private ownership of resources.

In a capitalist economy, prices are dictated by the interactions between buyers and sellers, which allows for variations based on consumer preferences and resource availability. This dynamic encourages innovation and efficiency, as companies strive to meet consumer demands competitively.

In contrast, socialism emphasizes collective or governmental ownership and control over production and distribution, where economic decisions are often made to promote equality rather than market demands. Feudalism is a historical economic system characterized by a hierarchical structure involving land ownership and serfdom, while mercantilism focuses on state control of trade and accumulating wealth through a favorable balance of exports over imports. Understanding these distinctions highlights why capitalism is uniquely identified with market-driven production and pricing.