An economic system refers to the structure of production, distribution and consumption of economic resources in a nation. In the United States, the market economy is primarily one in which individual producers and consumers set the standards for the types and costs of goods and services produced. The United States is considered a mixed economy, meaning it is compromised of both public and private control.
The free enterprise system in the United States places emphasis on private ownership. This is an advantage in that it gives individuals substantial freedom to conduct and operate their businesses as they desire. In America, most goods and services are produced by private businesses. However, there are certain limits to free enterprise. For instance, businesses might be subject to some kind of government supervision or regulation to protect consumers -- for example, banks cannot charge their customers any hidden fees, of which they have not been informed when opening an account.
Efficient Use of Resources
The United States has an abundance of natural resources, such as minerals and fertile soils. The way that the American economic system operates allows both the government and privately owned enterprises to utilize these resources, thus theoretically enhancing their optimal use.
A major disadvantage of the American economic system is the quality of health and welfare provided. This is especially tough for low-income earners. Medical professionals may be drawn to private practice because of better work opportunities. This affects individuals who may desire better quality health care than is available to them through government-regulated institutions.
Concentrated Market Power
The consequence of the United States economic system is that is has a tendency to encourage monopolies or oligopolies, which is when a small number of companies have dominating control or possession over a particular good or service. Examples include Microsoft in computer operating systems, WalMart in retail, Boeing in commercial aviation and Google in Internet searches. Monopolies may result in a rise in consumer prices and a restricted access to those goods and services, having detrimental effects on smaller businesses as they cannot compete in the market.