Final answer:
Competition in a free enterprise economy encourages innovation, efficiency, and lower prices as businesses strive to attract consumers by differentiating their products and services.
Step-by-step explanation:
Competition is a fundamental characteristic of a free enterprise economy, which is essential in supporting economic freedom and prosperity. It specifically encourages innovation, efficiency, and lower prices due to rivalry among businesses. This competitive environment ensures that companies continuously strive to improve their products and services and operate as efficiently as possible to minimize costs. As firms seek to differentiate their offerings and attract consumers, the result is often a greater variety of products, improvements in quality, and more competitive pricing. This stands in contrast to monopolistic control, limited consumer choices, and government intervention—in fact, competition is what naturally restricts these less desired market characteristics by promoting a healthy market dynamic where consumers have more options and power.