Features:

The main features of capitalism are:

(i) Private ownership: Private individuals and firms own the means of production and goods in the economy.

(ii) Freedom of choice: Individuals as consumers are free to spend their money income on those goods they consider desirable to satisfy their wants. This idea is called consumer soverignty and it influences what the producers will produce at any point in time. Hence the statement in the market - economy consumer is the king".

Similarly, the firms are also free to produce any good they want and which they are capable of producing.

(iii) Limited role for government: The functions of the government are limited to provision of enabling environment, rules and regulations for private economic activities to thrive.

(iv) Competition: Individuals and firms freely compete for goods and resources.

Therefore, in pure capitalism, the fundamental questions of what to produce, how to prodice and for whom to produce are resolved by price - mechanism i.e. the interplay of the forces of demand and supply.