An essential characteristics of market economy is

The essential characteristic of a market economy is consumer sovereignty. This means that consumers have the power to determine what goods and services are produced, how much they are willing to pay for them, and in what quantity they want them. In a market economy, producers respond to the demand of consumers and try to produce goods and services that will satisfy their needs and preferences in order to earn profits. Therefore, in a market economy, the consumers are in control and have the power to shape the economy by making decisions about what they want to buy and at what price. This leads to competition among producers to offer better quality products at lower prices, which results in consumer surplus.