Definition:A system where buyers and sellers decide what to produce, how much to produce, and for whom — using demand and supply. The government has little control.

Main Features:

• People own businesses (not the government)

• Prices are set by demand and supply

• Businesses try to make a profit

• Consumers choose what they want to buy

Advantages:

• More choices for consumers

• Efficient use of resources

• Encourages new ideas and competition

Disadvantages:

• Can lead to rich and poor gap

• Public services (like health care) may not be provided enough

• Can cause pollution and unfair treatment