Fig 1.1 broadly summarizes these categories of free markets and markets subject to forms of state intervention. In Fig. 1.1 (a) the market is composed only of business firms and private consumers – it is a free market. In Fig. 1.1 (b), the production side of the market is composed of both firms and government. Here then t he state has involved itself in the production of goods and services either alongside or, in some instances, perhaps instead of private firms. In Fig. 1.1(c) there is a layer of state regulation of the market as a whole.