The Role of Market Forces

Investors looked to the market to decide where to invest or what businesses to start. In a market economy, goods are bought and sold, and wages are determined by the market.

If a product is in high demand and supply is limited, the price will be high.

Entrepreneurs started businesses to supply high-priced or high-demand products. They abandoned businesses where the demand and prices were low.

Workers faced the same market forces. People with skills that were in demand in factories could expect higher wages than those whose skills had less value in the market.