A capitalist economy is a form of economic organisation in which means of production viz., land and capital are owned by private people. Capitalistic economy is also known as free market economy and Laissez faire economy.

Features of Capitalist Economy:

The main features of a capitalist economy are as follows:

(a) Factors of production are owned by the individuals.


(b) Every individual has freedom to start business of his own choice.

(c) All economic activities are guided by the motive of profit.

(d) Individuals are the owners and acquire property and pass it on to next heir after death.

(e) Government has little role to play in the functioning of the economy. (/) Prices of goods and services are determined by the market forces of demand and supply.