Which situation best reflects the concept of free enterprise?

• A. The government sets prices for all goods and services in the economy.
• B. All businesses are owned and operated by the state.
• C. Individuals are free to start businesses and compete in the market with minimal government intervention.
• D. A single company is given exclusive rights to produce and sell a product by the government.

Answer: (C)

Verified step by step guidance

1. Understand the concept of free enterprise, which refers to an economic system where individuals and businesses have the freedom to operate competitively with minimal government control.
2. Identify key characteristics of free enterprise: private ownership, voluntary exchange, competition, and limited government intervention.
3. Analyze each option to see if it aligns with these characteristics:
4. - Government setting prices for all goods and services indicates heavy government control, which contradicts free enterprise.
5. - All businesses owned and operated by the state means no private ownership, so it is not free enterprise.
6. - Individuals free to start businesses and compete with minimal government intervention matches the definition of free enterprise.
7. - A single company given exclusive rights by the government implies a monopoly granted by the state, which limits competition and is not free enterprise.