What describes a system based on free enterprise where businesses are privately owned?

A system based on free enterprise where businesses are privately owned is best described as a market economy. In a market economy, the production and distribution of goods and services are determined by supply and demand, primarily driven by private individuals or businesses. This allows for competition, innovation, and consumer choice, as individuals have the freedom to make their own economic decisions regarding investments, production, and consumption.

In contrast, a command economy refers to a system where the government has extensive control over economic activities, dictating what should be produced, how it is produced, and who gets the products. A planned economy follows a similar concept, often characterized by centralized governmental planning of economic activities. A socialist economy also emphasizes government or collective ownership and control of resources, prioritizing equality and redistribution of wealth, rather than the individual ownership central to a market economy.

The key characteristic of a market economy is the emphasis on private ownership and the role of free market mechanisms, which contrasts sharply with the other systems mentioned.