A market economy is known for <em>D. </em>
<em>It allows </em><em>competition</em><em> among companies.</em>
A market economy features private ownership of goods and services, freedom of enterprise, self-interest, and competition. In a market economy, the forces of demand and supply determine the prices of goods. The government does not play any significant roles except in regulation to ensure market efficiency.
Competition differentiates a market economy from all other economic systems, e.g. socialism and communism. In a market economy, monopolies are few. The government is not the producer of goods and services.
Thus, a characteristic of a market economy is competition.
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