Question

Briefly explain the essential properties of capitalism as an economic system.

Answer 1

Capitalism economic system refers to the type of economy where economic variables are freely controlled or measured by the market forces of demand and supply.

Essential properties of capitalism economic system are as follows:

1. The main feature or properties of capitalism is to get or earn maximum profit. Firms and companies only try to maximize profit by selling goods and services at high prices.

2. There is no government interference in capitalist firms, and companies can make their own decision after analyzing demand and supply factors in the market.

3. The competition is very high in the capitalist economic system as compared to the socialist. It is too hard for new organizations to survive in the market due to large numbers of competitors.