In a capitalist, or market, system, individuals are in charge of production, and the government does not intervene. This system, in which private companies or individuals control most of the production process, is also known as the free-enterprise system. It is driven by the choices of the people, who create a market. A market is an activity between buyers and sellers. In a market, there is supply, provided by producers, and demand, which comes from consumers. When there is demand, a seller will create and offer something that people may buy. When there is supply, consumers will decide whether to buy what is available. A market can be big, like the stock market. A market can be small, like a neighborhood where teenagers offer to mow lawns for a fee. Consumers are the force behind this system. Their demands drive what is produced and how much it costs. While people often think that the United States has a capitalist system, it actually has a mixed system.
True capitalism is more a theory than actual economic practice in the world today.
Also, in reality, sometimes which can be more often than not, prices and demand are controlled by other forces besides consumers. For example, home prices are not always dictated by buyers, but by real estate professional who advises sellers on what price to list a home. Oftentimes realtors will tell buyers that a home price is fair market value and will probably not go down, regardless of the offer price a buyer may submit.
