A free enterprise is, properly speaking, associate degree economy in the coursework of which costs of things square measure freely set supported the laws of provide and demand, untied by interference from a government or different outside body. A free enterprise is, at its most simple, associate degree economy run entirely by the market itself. within the universe, however, there is no such issue as a untied free enterprise, so the term is employed to describe economies that square measure mostly settled by economic method. As a result, whether or not or not a given economy is a free enterprise may be receptive some discussion.
A free enterprise may be contrasted by a command economy, wherever the costs for things square measure set by a force outside the market, like a government. Strict Communist economies, for example, don't permit the market to dictate costs, generating them command economies. In recent years, however, several Communist states have begun incorporating aspects of a free enterprise in to their systems. China could be a model of this model, usually known as market socialism or the socialist free enterprise. below market socialism, several key industries are literally in hand and operated by the govt in lieu of non-public trade, however the govt permits the costs of products and services to fluctuate supported the market, in lieu of victimisation their monopoly to line the costs as they select.
An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses and there is little government intervention or central planning. This is the opposite of a centrally planned economy, in which government decisions drive most aspects of a country's economic activity.