Written by the Fiveable Content Team • Last updated August 2025
Verified for the 2026 exam
Verified for the 2026 exam•Written by the Fiveable Content Team • Last updated August 2025
Definition
Private businesses are commercial enterprises owned by individuals or groups that aim to generate profit through the production and sale of goods or services. They operate independently from the government and typically prioritize financial success.
Corporation: A specific type of private business entity that is legally separate from its owners (shareholders) and offers limited liability protection.
Entrepreneurship: The activity of creating new business ventures or taking risks within existing businesses with the aim of making a profit.
Market Economy: An economic system where most resources are owned privately, decisions regarding production and consumption are made based on market forces such as supply and demand.