Presentation 1

BUSINESS ECONONOMICS
Economics systems, Capitalism features, advantages

and disadvantages
Presented by
Hadhi Muhammed
BBA LLB – S1A
ROLL NO. 6
Presented by
Presented by
Hadhi muhammed
Hadhi Muhammed
CAPITALISM FEATURES , ADVANTAGES
AND DISADVANTAGES
What is Capitalism?
Capitalism is an economic order in which the resources

are owned by a few rich and private people, and
production will be done for profit. There will be complete
free trade and competition. There will be no restriction or
interference by the government. Everything is left to
private enterprise.
Features of capitalism
1. Private property
2. Freedom of Enterprise
3. Profit Motive
4. Price Mechanism
5. Consumer Sovereignty
6. Free Trade
7. Government Interference
8. Freedom of Ownership
9. Flexibility
1.Private Property
Factories, plants and machineries, Industries, equipment and resources everything is privately owned in a Capitalist
economy. Privately it can be owned by individuals or companies.
2.Freedom of Enterprise
By freedom of enterprise we mean that every person in a Capitalist economy has the right to make decisions. There is
no interference from the government. Every person includes all the consumers and the producers.
3.Profit Motive
Profit earning is the main motive of a capitalist economy. Producers make and sell what they feel is profitable for them.
4.Price Mechanism
Market demand and supply determines the price in a Capitalist economy. Unlike a socialist economy where the
government decides the prices, here market forces determine the price.
5.Consumer Sovereignty
Consumers are free to choose which product they will buy or which service they will opt. There is no influence or
intervention from anyone. Their demand is what induces the companies to produce a product so they can earn profit.
6.Free Trade
International trade is promoted in a Capitalist economy as tariff barriers are very less.
7.Government Interference
Like stated above, government intervention is zero in a capitalist economy. Producers and consumers work with their
own will.
8.Freedom of Ownership
In a socialist economy no person is allowed to accumulate property or wealth in excess. But in a Capitalist economy a person
can accumulate wealth, have property and use it when they want. There is no restriction.
9.Flexibility
In terms of employment and labor there is complete flexibility in a Capitalist economy. One can choose the job they want to do
and hiring labor is also very easy.
Advantages of a Capitalist Economy
By now we know that a capitalist economy is what every country aspires to be in the near future. As Ron Swanson from the
sitcom Parks and Recreation once quoted : “Capitalism God's way of determining who is smart and who is poor."
There are so many advantages, some of which have been pointed out below:
1.Producers in a capitalist economy are rewarded and incentivized for their produce. They are motivated to grow and produce
the best products for the market. The main aim is profit making and holding the property for a long term. This brings out the
best in every producer.
2.In a capitalist economy the country grows and booms faster. More investors come to invest in businesses. Businesses are also
under no pressure to fulfill every demand of consumers. They have the freedom to make what they feel like and what will give
them profit.
3.There is optimum use of every resource. In a capitalist economy each resource is owned privately therefore people use the
resources judiciously and no wastage is done.
4.For consumers, a capitalist economy offers much more choices in terms of products and services. They can choose what they
like. Moreover producers are in a race to produce the best products so that they can attract more consumers in the market to get
maximum profits.
5.Research and development also increases as more investors come.
6.In a capitalist economy there is much more innovation and efficiency as compared to a socialist economy.
DISADVANTAGES OF CAPITALISM
A Capitalist economy is a free market and it originated in the 18th century in England. It has some cons as well.
“Capitalism means that a few people will do very well, and the rest will serve the few.”- Michael Moore
Let us look at the cons:
1.In terms of income there will be inequalities among people. It will lead to an increased gap between the rich and the poor.
2.Firms enter the monopoly stage and it becomes difficult for workers and small producers to live in such a state.
3.As resources are privately owned, people start using them in any way they like. It causes scarcity and natural balance also gets
distrubed.
A Capitalist Economy is one of the three economic systems that a
country uses. It has its own merits and demerits as stated. For
developing countries like India, this model can create more issues than
merits. Therefore, it depends entirely on a country as to which system it
will adapt.
THANK YOU

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BUSINESS ECONONOMICS

Economics systems, Capitalism features, advantages

Capitalism is an economic order in which the resources

Let us look at the cons:

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