Question

Describe the difference between a command, a market, and a mixed economy.

Answer 1

A command economy is an economic system when the government will be having control over the production and the pricing of the goods and services and it will be a planned economy in which the government will be deciding upon the goods and services which will be produced and distributed and the government will be the central planning authority. There will not be any level of competition in the command economy and there are are too much of one product and there are not much substitute available.there is a risk related to development of a black economy or the shadow economy.

Market economy is a free market system in which there will be unrestricted and unregulated economy and there will be high competition between the privately owned businesses in order to determine the prices and demand. This will be a complete free market in which there will be no government regulation and no government entity so all the organisations will be private enterprises and they will be having high competition.

Mixed economy has features of both the command and the free market system and it is partly controlled by the government and it is partly based upon the forces of supply and demand so it will be mixing the public and the private sector and there will be a limited government regulation in the mixed economy where there is a limited government regulation and control than the command economy.this mixed economy will be characterized by the corporate profitability and use of fiscal and monetary policy to stimulate the growth