In a free market economy the allocation of resources is determined by the demand and supply without any interference of the government.

Examples of free market economy are listed below.

★ Deregulation of the US airlines in 1979 provided consumers with more choice and lower air fares.

★ The cable industry was deregulated in 1996 and the cable TV rates went up enormously. As per the report presented by the US Public Interest Research Group (PIRG) in 2003, cable rates increased by more than 50% between 1996 and 2003. Clearly, in this case of deregulation, increased competition did not reduce prices for consumers.