Private enterprise under the free-market system requires the existence of four
conditions:
• Private property - individuals have the right to own private property and resources that are used to create wealth.
• Freedom of choice – employees can work where they choose, consumers can buy what they want, and firms can hire people and produce what they choose.
• Profits – owners can keep the profits for themselves as rewards for taking risks.
• Fair competition – free and fair competition is the basis for a free-market system to operate efficiently.