ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A capitalist economy is a type of free market economy; the profit motive drives all commerce and forces businesses to operate as efficiently as possible to avoid losing market share to competitors.

Detailed explanation-2: -A market economy has freedom of choice and free enterprise. Private entrepreneurs are free to get and use resources and use them to produce goods and services. They are free to sell these goods and services in markets of their choice.

Detailed explanation-3: -free market, an unregulated system of economic exchange, in which taxes, quality controls, quotas, tariffs, and other forms of centralized economic interventions by government either do not exist or are minimal.

Detailed explanation-4: -The biggest advantage of a free market is the flexibility both the buyer and seller have in how they interact. With little government regulation, buyers can spend their money however they choose. For this reason, they can make purchasing decisions based on what they need, want, and have the resources to purchase.

Detailed explanation-5: -Market-based systems allow for more individual freedom and thus, less government control.