What is economic incentive in a free enterprise economy?

An economic incentive is a financial motivation for people to take a certain action. These motivate people to behave in a particular way through a punishment or a reward in the shape of money. An example of this are tax incentives. Tax incentives are reductions in tax that the government makes in order to motivate people to spend money in a particular area.

Deals with money

Explanation:

In a free enterprise economy, business firms will produce the goods that consumers want. Five major features define free enterprise: private property, choice, voluntary exchange, competition, and economic incentives. Profit is the money left over after the what you paid.