How is laissez-faire capitalism best defined?

Laissez-faire capitalism is best defined as a system where business activities operate with minimal government intervention. In this economic model, the emphasis is on free markets, allowing individuals and businesses to make decisions about production, pricing, and distribution based on competition and consumer choices, without external government control.

This approach is rooted in the belief that when markets are left to operate freely, they are more efficient and effective at allocating resources compared to systems with heavy regulation. In the context of the options provided, the third choice accurately encapsulates the essence of laissez-faire capitalism, highlighting the absence of regulatory constraints on business activities.

The incorrect choices reflect different economic concepts incompatible with laissez-faire principles. For instance, government control over resources directly contradicts the notion of free enterprise, while a mix of public and private ownership suggests a regulated economy. Similarly, the mention of legislations governing trade indicates a regulated framework, which stands at odds with the laissez-faire ideology.