Capitalism is an economic and political system in which a country's trade and industry are controlled by private owners for profit.
The United States of America, USA, Practices capitalism to some extent. It is a mixed economy, but leans more toward a market economy. For the most part, USA producers decide which goods and services to make and offer to sell, and what prices to charge for those products. Goods are things that you can physically touch, in other words your wants. Examples of goods are cars, food, clothing, houses and toys. Services are activities that people do for themselves or others. Examples of services are cutting hair, polishing shoes, teaching school, and providing police or fire protection. Although the USA doesn't have a market economy, the government does play an important role. It provides goods and services that the market cannot provide effectively, such as national defense, assistance programs for low-income families, and interstate highways and airports. The government also provides incentives to encourage the production and consumption of certain types of products, and discourage the production and consumption of others. It sets general guidelines for doing business and makes policy decisions that affect the economy as a whole.
A Mixed Economy is basically the best of both worlds. It is a combination of both private and public enterprises; reflecting characteristics of capitalism and socialism. There are big corporations that are not involved with the government whatsoever, but there are also some corporations and companies owned and controlled by the government. The economic freedom side includes privately owned industry for reasons including individual freedom, economic efficiency, and the incentive to innovate provided by competition. In certain circumstances like environmental protection, maintenance of employment standards, and maintenance of competition, the government will intervene and handle concerns that the private sector cannot. It keeps significant loss and gain to a minimum as the economy tends to adapt to change.
A Market Economy is where supply and demand regulates the economy, rather than government intervention. There is free competition and prices are determined by the interaction of supply and demand. An individual income can rise and fall depending on their success. It does not depend on the communities prosperity, but rather their own. Everything is driven but supply and demand so its allowing individual gain and random prosperity.