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Capitalism is a way of organizing an economy in which the means of production (like factories, machines, and land) are privately owned by individuals or companies, rather than by the government or the people as a whole. This means that people who own these resources can use them to make things to sell for a profit. In capitalism, goods and services are produced for exchange in markets, and prices are determined by supply and demand. Capitalism also emphasizes competition between businesses, which can lead to innovation and efficiency, but can also lead to inequality and exploitation.