ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Capitalism is an economic system that is controlled by market forces. It promotes and encourages businesses and private individuals to own capital goods.

Detailed explanation-2: -A market economy promotes free competition among market participants. Notable benefits of a market economy are increased efficiency, production, and innovation.

Detailed explanation-3: -Therefore, competition is a key ingredient to capitalism-it keeps corporate greed in check and encourages competitive pricing and responsible management for a company to remain viable. It is important to note that one way public companies reduce operational costs is through industry consolidation.

Detailed explanation-4: -Free Market System In a free market economy, competition dictates how goods and services will be allocated. Business is conducted with more limited government involvement concentrated on regulations that dictate how businesses are permitted to operate.

Detailed explanation-5: -These include laissez-faire or free-market capitalism, anarcho-capitalism, state capitalism and welfare capitalism. Different forms of capitalism feature varying degrees of free markets, public ownership, obstacles to free competition and state-sanctioned social policies.