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Simple English definitions for legal terms
free enterprise
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A quick definition of free enterprise:
Free enterprise is a system where people can make and sell things for money without the government telling them what to do. It's like a big competition where businesses try to make the best products and sell them for the best price. This is different from communism, where the government controls everything.
A more thorough explanation:
Free enterprise is a system of production and distribution that is conducted privately and with consent. It is usually done for profit in a competitive environment that is relatively free from government interference. This system is also known as capitalism.
In a free enterprise system, individuals and businesses are free to produce and sell goods and services as they see fit. They are also free to compete with one another for customers and profits. The government's role is limited to enforcing laws and regulations that protect consumers and ensure fair competition.
- A small business owner opens a bakery and sells baked goods to customers in the local community. They are free to set their own prices and determine what products to sell.
- A tech startup develops a new app and offers it for sale on the app store. They are free to market their product and compete with other app developers.
- A farmer grows crops and sells them at a local farmers market. They are free to choose what crops to grow and how much to charge for them.
These examples illustrate how individuals and businesses in a free enterprise system are free to produce and sell goods and services as they see fit. They are also free to compete with one another for customers and profits. This competition helps to drive innovation and improve the quality of goods and services offered to consumers.