Final answer:
Capitalism encourages competition, and is characterized by economic freedom, competition, and the profit motive, which all contribute to innovation, efficiency, and wealth creation in a free market economy.
Step-by-step explanation:
​Capitalism encourages competition, takes the government out of the question, and gives financial incentives for hard work (in theory). In a capitalist system, individuals and businesses operate in a free market where economic freedom allows producers to decide what to produce, how to produce it, and for whom to produce, while consumers have the freedom to decide what to purchase and where to engage in work. Competition is a fundamental aspect of capitalism as it motivates producers to innovate and be efficient ensuring the creation of wealth and a diversity of goods and services at responsive prices. Additionally, capitalism is built on the concepts of private property rights and the profit motive, where it is believed that individuals should have the opportunity to risk their resources to achieve a return on investment, fostering entrepreneurship and the overall growth of the economy.