WORLD HISTORY

Detailed explanation-1: -The production of goods and services under capitalism is based on supply and demand in the general market-known as a market economy-rather than through central planning-known as a planned economy or command economy. The purest form of capitalism is free market or laissez-faire capitalism.

Detailed explanation-2: -The capitalist mode of production proper, based on wage-labour and private ownership of the means of production and on industrial technology, began to grow rapidly in Western Europe from the Industrial Revolution, later extending to most of the world.

Detailed explanation-3: -In a capitalist economy, capital assets-such as factories, mines, and railroads-can be privately owned and controlled, labor is purchased for money wages, capital gains accrue to private owners, and prices allocate capital and labor between competing uses (see “Supply and Demand”).

Detailed explanation-4: -Laissez-faire principles or less to no government intervention is followed under the capitalistic economy. Due to this the prices are decided by the demand and supply forces. If there are large number of buyers of a commodity it’s demand goes up, producers also increase the supply and prices of this go up.

Detailed explanation-5: -Capitalism’s success is dependent on a free-market economy, driven by supply and demand. With socialism, all legal production and distribution decisions are made by the government, with individuals dependent on the state for food, employment, healthcare, and everything else.