How are the basic economic problems solved under capitalism?


1.       In a capitalist economy consumers enjoy freedom of choice regarding what and how much to buy.
2.       Producers have occupational freedom
3.       The decisions about what, how and how much to produce as well as how to distribute etc. are taken with the help of free play of demand and supply forces.
4.       Producers adopt the most efficient technique of production to earn maximum profit.

5.       There is no government interference in economic activities. For e.g. U.S.A.