U.S. Free Enterprise System Quick Check

What is profit in an economic system?

Profit is the financial gain resulting from an exchange

What is voluntary exchange?

Voluntary exchange is where buyers and sellers willingly choose to participate in transactions and both parties receive a net benefit.

What is open opportunity?

Open opportunity occurs when consumers and producers can choose to compete in any market place.

Why does the free enterprise system help keep prices low?

Producers must meet consumer expectations for the price or be forced out of the market by competition because of the open opportunity.

Why does the free enterprise system tend to keep the quality of products high?

Producers will be motivated to improve quality to differentiate their product in the market