Free enterprise means what?

• A. Individuals own businesses
• B. The government controls all industries
• C. The economy is planned
• D. Prices are fixed by the state

Answer: (A)

Free enterprise is an economic system where private individuals own and run businesses, and market forces guide production and pricing with relatively limited government intervention. This means people decide what to produce, how to produce it, and at what prices to sell, competing with others and responding to consumer demand. It’s characterized by private property rights, voluntary exchange, and competition that helps shape outcomes through the price system. The other descriptions describe alternative systems—government control of all industries, central planning, or state-set prices—which contrast with the idea of individual ownership and market-driven decisions. Therefore, the statement that individuals own businesses best captures what free enterprise means.