Equilibrium and Economies of Scale in Socialist Economy?

Answer 1

The idea of market socialism arose from the realization that classical socialism, involving the collective provision and distribution of goods and services in natural form, without the social contrivances of property, markets, and prices, was not http://www.answers.com/topic/feasible, since rational collective control of economic activity requires calculations that cannot rely consistently on "natural unit" variables such as energy or labor amounts. It also became clear that the existing computing capabilities were inadequate for deriving a consistent economic plan from a general equilibrium problem. This led, in the Socialist Calculation Debate of the 1930s, to the suggestion (most notably by Oskar Lange) that a Socialist regime, assuming ownership of all means of production, could use markets to find relevant consumers' prices and valuations while maintaining social and state control over production, income determination, investment, and economic development. Managers would be instructed to minimize costs, while the planning board would adjust producers' prices to eliminate disequilibria in the markets for final goods. Thus, at a socialist market equilibrium, the classical marginal conditions of static efficiency would be maintained, while the State would ensure http://www.answers.com/topic/equitable-distribution-1 of incomes through its allocation of the surplus (profit) from efficient production and investment in socially desirable planned development.

Answer 2

In a socialist economy, equilibrium refers to the balance between supply and demand for goods and services. Economies of scale in a socialist economy occur when the average cost of production decreases as output increases due to factors like specialization and efficient use of resources. Achieving equilibrium and economies of scale are important for ensuring efficient resource allocation and maximizing welfare in a socialist economy.