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In centrally planned economies the needs and wants of consumers are met?
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Why do centrally planned economies have difficulty meeting consumers need?
In a free-market economy, the various suppliers of goods can increase or decrease production in relation to sales in the marketplace. This means that consumer's needs can be properly taken into account by the suppliers. Conversely, in a centrally planned economy, there is a long time differential between the supply as determined by the government and any changes that the government may make to that supply. As a result, the marketplace cannot adequately take care of consumers' needs.Additionally, it is not clear that the government will allocate production based on what the consumers actually want to consume. Governments may choose to produce specific products that they wish more members of the populations to have and fewer products that they wish to not be used in society. The amount of product in the market could be set based on bribes and corruption. The amount of product in the market could be based on government interest in companies making the product. There are even cases where the government wants to properly map consumers' needs, but are unable to accurately forecast those needs.
Does the planned econmy have profit motive?
No. Planned economies are a feature of Communist societies, who by definition of their ideology were not profit-driven. Planned economies have as their main motive to exactly provide for the needs of a Communist State and its citizens, as they are calculated for usually 5 to 10 years ahead.
Is a centrally planned economy desirable?
As this is a question looking for an opinion, you may have dissenting answers.Answer 1 - NoThe main problem with a centrally planned economy, and from which nearly all problems with the system derive, is the inability for forecasters to properly predict what future consumption will be. This inevitably leads to shortages, when a good is more desirable than previously estimated, and overages, when a good is less desirable than previously estimated. These shortages and overages lead to price instability, which harms businesses and consumers who can no longer adequately budget for their needs in a climate of price jumps and falls. Correspondingly, people buy less than they may want in order to only get what they absolutely need and save for a rainy day. This leads to a contracted economy overall. A free-market economy is able to circumvent the problem of shortages and overages more effectively since businesses are able to increase or decrease production with realtime market information.It should not surprise anyone that every centrally planned economy has resulted in poor growth and dissatisfaction of the population.
Name two factors that influence a consumers needs and wants?
Two factors that could influence a consumers needs and wants could be their peers or advertising.
What is the difference between market and command economies?
In a market economy, resources are allocated to the production of goods and services on the basis of decisions made by individual businesses anticipating customer needs and desires. The communication link between producer and consumer can be direct. In a command economy, resources are allocated to the production of goods and services on the basis of decisions made by government technocrats, usually based on directives from a centralized political body anticipating the needs, and possibly wants, of the nation and its citizenry. The communication link between producer and consumer is routed through and interpreted by technocrats, who are often employed by politicians that may or may not have been elected by the citizenry (consumers).
What is a disadvantage of a centrally-planned economy?
it cannot meet consumers needs and wants
What a major disadvantage of centrally planned economy?
it cannot meet consumers needs and wants
Why do centrally planned economies have difficulty meeting consumers need?
In a free-market economy, the various suppliers of goods can increase or decrease production in relation to sales in the marketplace. This means that consumer's needs can be properly taken into account by the suppliers. Conversely, in a centrally planned economy, there is a long time differential between the supply as determined by the government and any changes that the government may make to that supply. As a result, the marketplace cannot adequately take care of consumers' needs.Additionally, it is not clear that the government will allocate production based on what the consumers actually want to consume. Governments may choose to produce specific products that they wish more members of the populations to have and fewer products that they wish to not be used in society. The amount of product in the market could be set based on bribes and corruption. The amount of product in the market could be based on government interest in companies making the product. There are even cases where the government wants to properly map consumers' needs, but are unable to accurately forecast those needs.
Does the planned econmy have profit motive?
No. Planned economies are a feature of Communist societies, who by definition of their ideology were not profit-driven. Planned economies have as their main motive to exactly provide for the needs of a Communist State and its citizens, as they are calculated for usually 5 to 10 years ahead.
What is a major disadvantage of a central planned economy?
it cannot meet consumers needs and wants
Is a centrally planned economy desirable?
As this is a question looking for an opinion, you may have dissenting answers.Answer 1 - NoThe main problem with a centrally planned economy, and from which nearly all problems with the system derive, is the inability for forecasters to properly predict what future consumption will be. This inevitably leads to shortages, when a good is more desirable than previously estimated, and overages, when a good is less desirable than previously estimated. These shortages and overages lead to price instability, which harms businesses and consumers who can no longer adequately budget for their needs in a climate of price jumps and falls. Correspondingly, people buy less than they may want in order to only get what they absolutely need and save for a rainy day. This leads to a contracted economy overall. A free-market economy is able to circumvent the problem of shortages and overages more effectively since businesses are able to increase or decrease production with realtime market information.It should not surprise anyone that every centrally planned economy has resulted in poor growth and dissatisfaction of the population.
disadvantage of planned economy?
Lack of incentives to work hard in planned economy Sometimes poor quality of goods and shortages Failure to meet set ideals or consumer needs. Lack of varieties of goods and services Consumers can choose only those goods or services which are produces and decided by the government
Name two factors that influence a consumers needs and wants?
Two factors that could influence a consumers needs and wants could be their peers or advertising.
What needs and wants are hard to answer for Government intervenes in market economies?
Money makes is hard to determine what needs and wants people can afford. The government has difficulty intervening in market economies because financial situation vary greatly.
What is the difference between market and command economies?
In a market economy, resources are allocated to the production of goods and services on the basis of decisions made by individual businesses anticipating customer needs and desires. The communication link between producer and consumer can be direct. In a command economy, resources are allocated to the production of goods and services on the basis of decisions made by government technocrats, usually based on directives from a centralized political body anticipating the needs, and possibly wants, of the nation and its citizenry. The communication link between producer and consumer is routed through and interpreted by technocrats, who are often employed by politicians that may or may not have been elected by the citizenry (consumers).
What has a major obstacle to economic development in China been?
Language bareer. Domestic market and demand. Limitations in consumers needs like we have had in western. Post industrial development. What can China do when facing those prospects all emerging economies sooner or later will do. Economies develops and so must industry and manufacturing. Service sector must grow to keep economy growing. Are they able??
What would cause a resurgence of planned economies?
Planned economies rely on centralized government to control all or most factors of production and to make all or most production and allocation decisions. A market economy is an economy in which individuals control production and allocation decisions through supply and demand. Planned economies appeal to people as a solution to a large amount of poverty. They promise a high rate of growth in economic prosperity, an improving quality of life, and a different distribution of wealth than market economies. When the economy fails to improve, and quality of life in the country fails to improve at the pace of market economies, the government tends to relax its control and a market economy develops. Previously planned economies are controlled by oppressive and unaccountable politicians who eventually lose power. If an economy in a nation is characterized by a large number of people in extreme poverty and a high unemployment rate, a planned economy could be used to bring order and to stimulate productivity. Former Soviet Union disbanded due to food shortages in their planned economy, showing poor planning by their leaders. Theoretically in a market economy, when a shortage of a good arises, the prices of that good will rise giving an incentive to entrepreneurial business people to produce more of that product so they can reap the increased profits. Recently, a drought killed a large amount of corn crop, driving the price of beef and other foods up. If there were a severe drought enough to where there is not enough water to grow crops and food needs to be rationed carefully, the government may move towards a planned economy. America has a mix between market and planned economies, in that some economic activity is subsidized while some businesses have regulations. For example, when Enron caused a spike in energy prices beyond a reasonable amount in California, the government forced the company to lower its price. Being the only option for energy needs in areas where Enron provided service, a natural monopoly, Enron could have in a true market economy charged as much as they wanted for electricity and all those involved would have taken great profits.
