The government has more authority in a command economy, while private citizens and companies have more influence in a market economy, according to Infoplease from Pearson Education. The government directs the types and levels of production in a command market. Private producers choose the amount of goods to supply the market in a market economy.Know More
The United States has a market economy. The U.S. government intervenes moderately to set price floors and price ceilings. Otherwise, prices of goods and services are driven by the level of consumer demand for them, notes Infoplease. If consumers demand more than suppliers can produce, prices are typically high. If consumers do not want what suppliers produce, prices are typically low.
In a command economy, all aspects of the production and usage levels are planned by the government. Government officials evaluate the resource needs of the marketplace and forecast necessary production levels. Then, producers are directed to manufacture a prescribed quantity of goods during a period of time. Socialism and communism are primary forms of government that rely on command economies, according to Infoplease. The goal of a command economy is to ensure equal rationing of goods. The primary goal of a market economy is to promote innovation and ambition in spite of the potential for income inequality.Learn more about Investing
A command economy is one in which all economic decisions are planned by a centralized authority. The governments who practice this form of economics control the overall economy by creating laws and regulations that control both state-owned and privately owned businesses.Full Answer >
The disadvantages of monopolies are not to the monopolistic companies themselves, but are instead suffered by their competitors and the overall market through the effects of pricing discrimination, price fixing and the influence of "corporate cartels" that are able to deter competition through shared directorship and company mergers. Monopolies can act as "price makers" and force their competitors to become "price takers." Lacking the economies of scale enjoyed by a monopolistic company, a smaller company can then be "priced out" of the market, which leaves the field open to the monopoly company.Full Answer >
A planned or command economy is one in which major functions, such as production and distribution of goods, are controlled by the government. In a planned economy, the government owns some or all production facilities and decides what to produce and how goods are priced. This is in contrast to a market economy, where production and distribution are decided by market forces with little or no government intervention.Full Answer >
A command economy is one in which the government is the chief agent in all major economic actions. The government goes as far as to determine what is to be made, how much is made, how it is distributed and how it is transformed into services the public can use. In many instances, even prices are set by the government.Full Answer >