What economic system is characterized by private ownership and a free market?

The correct answer is capitalism, an economic system that emphasizes private ownership of resources and means of production, along with the operation of a free market. In capitalism, individuals and businesses make decisions concerning the allocation of resources, goods, and services based on supply and demand dynamics. Free market principles encourage competition and minimal government intervention, allowing prices to fluctuate based on what consumers are willing to pay and what producers are willing to sell.

In contrast, communism and socialism advocate for varying degrees of collective or government ownership and control over resources and economic activities, which contrasts fundamentally with the private ownership characteristic of capitalism. Feudalism, on the other hand, represents a historical system based on land ownership and a rigid hierarchical structure, focused more on agricultural production and obligations rather than the market-driven economies typical of capitalism. Therefore, capitalism is the economic system defined by its reliance on free market mechanisms and private ownership.