In a capitalist economy, the factors of production are owned individually. This means that private individuals, rather than the government or society as a whole, own and control the resources necessary for production. Let's explore this concept in more detail:

1. Factors of production: The factors of production refer to the resources and inputs used in the production of goods and services. They typically include land, labor, capital, and entrepreneurship. Land represents natural resources, labor refers to human effort and skills, capital includes physical and financial assets, and entrepreneurship involves the organization and management of these resources.

2. Individual ownership: In a capitalist economy, these factors of production are owned and controlled by private individuals. This means that individuals have the right to own property, including land, buildings, equipment, and financial assets. They are free to use these resources in whatever way they deem fit, within the boundaries of the law.

3. Private enterprise: Capitalism is characterized by private enterprise, where businesses are owned and operated by individuals or groups of individuals. These individuals have the freedom to start businesses, make investments, and engage in trade and commerce. They can hire workers, acquire capital goods, and make decisions regarding production, pricing, and distribution.

4. Profit motive: In a capitalist economy, the primary motivation for economic activity is the pursuit of profit. Individuals and businesses aim to maximize their financial gains by producing goods and services that are in demand and selling them at a higher price than the cost of production. This profit motive serves as an incentive for innovation, efficiency, and productivity.

5. Market-based allocation: In a capitalist economy, the allocation of resources is primarily determined by market forces of supply and demand. Prices play a crucial role in signaling information and coordinating economic decisions. The interaction of buyers and sellers in competitive markets influences the allocation of resources, the production of goods and services, and the distribution of income.

Overall, in a capitalist economy, the factors of production are owned individually, and economic decisions are driven by private individuals and businesses pursuing their self-interest and maximizing profit. This system promotes individual freedom, competition, and market efficiency.