A free market is an economic system where prices for goods and services are determined by open competition among businesses, without significant government intervention. This system encourages innovation and efficiency, as companies strive to meet consumer demands while maximizing profits. In a free market, individuals have the freedom to choose their own economic activities, such as what to produce, how to produce it, and at what price to sell. This autonomy fosters a dynamic environment where resources are allocated based on supply and demand, leading to a more responsive economy.