ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -2. Incentives for innovation and production efficiency. In a free market with competition, the enterprises that can produce more efficiently are rewarded with higher profits. Companies are thus motivated to allocate capital to achieve innovation and efficiency of production.

Detailed explanation-2: -Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.

Detailed explanation-3: -Countries like England, France, and India follow the mixed economic system where both, the state and private players, have control over the resources of distribution.

Detailed explanation-4: -For example, the United States is a mixed economy, as it leaves ownership of the means of production in mostly private hands but incorporates elements such as subsidies for agriculture, regulation on manufacturing, and partial or full public ownership of some industries like letter delivery and national defense.