Question

Brian has just finished college. He wants to set up a small business to make and sell fireworks. He registers his company and acquires a license from the government. He finds that most of his competitors are selling fireworks at an extremely low price. He would like to make more money, so he decides to innovate and develop better fireworks. He sells his fireworks at a higher price, and they are a huge hit with the customers. After a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. He even starts exporting fireworks overseas. Which type of economy does this scenario describe?

Answer 1

I believe the answer is: Market Economy

In the market economy, the type and price of a certain product would be completely driven by the the amount of supply and demand in the market. People in market economy had the right to choose the type of job or goods that they want to produce and tend to be benefited by inventing a new products that well liked by the market.