Which type of market allows prices to be determined by supply and demand without restrictions?

A free market is characterized by minimal government intervention, allowing prices to be determined solely by the forces of supply and demand. In this system, sellers and buyers interact in open competition, negotiating terms based on their individual preferences and the availability of goods and services. The absence of restrictions means that any person or business can enter or exit the market freely, which fosters innovation, efficiency, and responsiveness to consumer needs.

In contrast, other types of markets include elements of control or tradition that hinder the pure operation of supply and demand. A mixed market, for example, incorporates both private enterprise and government regulation, blending aspects of free and command economies. A command economic system relies heavily on centralized planning and control, where the government makes all the decisions regarding production and pricing. Meanwhile, a traditional economic system bases its economic practices on customs and historical precedents, which can prevent pricing from adjusting freely to current conditions. Each of these systems includes restrictions or influences that interfere with the unencumbered operational dynamics of supply and demand found in a free market.