The millions of decisions made daily by consumers and suppliers drive the distribution system in the free market.
The free market is a summary description of all voluntary exchanges that take place in a given economic environment. It primarily means a system where the buyers and sellers are solely responsible for the choices they make.
In a way, free market gives the absolute power to prices to determine the allocation and distribution of goods and services.
Free markets are characterized by a spontaneous and decentralized order of arrangements through which individuals make economic decisions. Based on its political and legal rules, a country’s free market economy may range between very large or entirely black market.
In principle and practice, free markets are defined by private property rights, voluntary contracts and competitive bidding for goods and services in the marketplace. This is held in contrast to public ownership of property, coercive activity and fixed or controlled distribution of goods and services.
To learn more about how free market works, go to Investopedia.com and EconomyWatch.com.