Open Market

DEFINITION of 'Open Market'

An economic system with no barriers to free market activity. An open market is characterized by the absence of tariffs, taxes, licensing requirements, subsidies, unionization and any other regulations or practices that interfere with the natural functioning of the free market. Anyone can participate in an open market. There may be competitive barriers to entry, but there are no regulatory barriers to entry.

BREAKING DOWN 'Open Market'

An open market is the opposite of a closed market - that is, a market one with a prohibitive number of regulations restricting free market activity. Most markets are neither truly open nor truly closed, but fall on a continuum somewhere between the two extremes. The United States would be considered to have a relatively open market, while North Korea would be considered to have a relatively closed market.

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