---
title: "Market Economy Definition and Features | Model Diplomat"
description: "A market economy is an economic system where supply and demand dictate production and pricing, emphasizing decentralized decision-making and individual choices."
url: "https://modeldiplomat.com/learn/glossary/market-economy"
---

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Model Diplomat Research Team · Last reviewed June 22, 2026

TL;DR

- An economic system where supply and demand dictate production, distribution, and prices, championed by Adam Smith.
- What defines a market economy?
- How does a market economy differ from a planned economy?
- Who is a key proponent of market economies?

[Leaders & Thinkers](https://modeldiplomat.com/learn/leaders/glossary)Updated June 22, 2026

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