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- Central Planning: A centrally planned economy relies on a party in power to decide what resources should be allocated to various demands as they see fit.
- Free Market: A free market economy relies on prices to determine where demand should be filled and to what extent.
Because of these differences, an economy that is centrally planned is usually inefficient in their allocation of resources to each market. They decide beforehand which areas will get resources, restricting the supply and setting a price with no knowledge about the consumer's choice.
A free market is much more adaptable, using price as a communicator, supply, demand and price interact to form equilibriums that satisfy market clearing outcomes. This system is much more efficient in that the people who value the goods most are able to get them. This is the idea, it doesn't always work perfectly.
Wiki User
∙ 13y ago
Wiki User
∙ 13y agoMarket economy is for capitalist economy system where decisions about market activities are made up by individuals rather than government.
Command economy is for communism system where decisions about market activities are made up by centrally planned government.
Wiki User
∙ 11y ago1. in the centrally planned economic system, the government determines the prices of goods and services but in the market driven economic system the supply and demand and the competition determines the prices of the goods and services.
2.in the centrally planned the government control the distribution of goods and services, while in the market driven, distribution is privately held.
3. in the centrally planned, the government determines wages but in the market driven, employers determines the wages.
Wiki User
∙ 12y agoA market economy is an economy where the law of demand and supply dictates the price of goods and the distribution of resources allocated to the production of different goods. ie a good that is in high demand and low supply will cost a lot, while a good in high supply and low demand will cost little. The profits to be had in the production of high demand goods will lead producers to use their resources to produce goods wanted by consumers therefore limiting wasted resources producing goods people do not want.
Centrally Planned economies are economies where the Government decides what where and how much of a good is produced and how much it will cost, meaning consumers are usually left with limited choice in goods to purchase. Examples of centrally planned economies includes the DPRK (North Korea).
A mixed economy is one where the market controls the production of some goods as described for a market economy while other goods (usually those considered essential services like healthcare, water and waste management) are controlled by the government. Most nations are mixed economies including the United States of America, Great Britain, Russia and Australia.
Wiki User
∙ 11y agohow does a command economy differ from a market economy
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How does command economy's differ from a market economy?
In a command economy the government decides how resources are used and what goods and service are produced. In a market individuals make the decisions about how resources are used and what gods and services to provide.
How did the command economy under Stalin differ from a capatalist economy?
A command economy is a system where the government controls economic activity and the production and distribution of goods. In a capitalist economy, such things are determined by market forces.
What are the three types of economy?
Command economy, market economy, and traditional economy. The United States of America is a Market economy.
How does a command economy differ from a market economy?
In a command economy the government decides how resources are used and what goods and service are produced. In a market individuals make the decisions about how resources are used and what gods and services to provide.
What do you call an economy that is both partly command and market?
When an economy is partly command and partly market, is called a mixed economy.
How does a market economy differ from a command economy?
In a command economy the government decides how resources are used and what goods and service are produced. In a market individuals make the decisions about how resources are used and what gods and services to provide.
How does command economy's differ from a market economy?
In a command economy the government decides how resources are used and what goods and service are produced. In a market individuals make the decisions about how resources are used and what gods and services to provide.
How did the command economy under Stalin differ from a capatalist economy?
A command economy is a system where the government controls economic activity and the production and distribution of goods. In a capitalist economy, such things are determined by market forces.
What are the three types of economy?
Command economy, market economy, and traditional economy. The United States of America is a Market economy.
Is Bahrains economy command or market?
a market economy
Is Greece market or command economy?
Market economy
How does a command economy differ from a market economy?
In a command economy the government decides how resources are used and what goods and service are produced. In a market individuals make the decisions about how resources are used and what gods and services to provide.
What do you call an economy that is both partly command and market?
When an economy is partly command and partly market, is called a mixed economy.
Is turkey a market economy or command economy?
mixed market
Does Serbia have a traditional command or market economy?
It has market economy
Does Singapore have a command or free market economy?
A market economy
Does Belgium have a command or market economy?
Belgium has a market economy.
