Free-market capitalism is an economic system where the means of production are privately owned and operated for profit, with minimal government intervention. It allows individuals and businesses to make their own decisions regarding production, consumption, investment, and distribution.
Related terms
Supply and Demand: The relationship between the availability of a product or service (supply) and the desire or need for it (demand). Prices rise when demand exceeds supply and fall when supply exceeds demand.
Competition: The rivalry between producers or sellers in an industry striving for customers' business. It drives innovation, efficiency, and lower prices as businesses try to outperform each other.
Profit Motive: The driving force behind free-market capitalism, where individuals seek financial gain by making rational economic decisions. It incentivizes entrepreneurship and encourages efficient allocation of resources.