How is competition regulated in a command economy?

In a command economy, competition is regulated through various mechanisms implemented by the central planning authority. Unlike in a market economy where competition is primarily driven by market forces, in a command economy, the government or central planning authority controls and directs economic activities.

One way competition is regulated in a command economy is through the allocation of resources. The central planning authority determines the allocation of resources among different industries and enterprises based on their priorities and goals. This allows the government to control the level of competition by favoring certain industries or enterprises over others. By controlling the allocation of resources, the government can limit the number of competitors in a particular industry, thereby regulating competition.

Additionally, the central planning authority sets production targets and quotas for different industries and enterprises. These targets and quotas determine the amount of goods or services that each industry or enterprise is expected to produce. By setting these targets, the government can regulate competition by ensuring that each industry or enterprise has a specific market share. This helps prevent excessive competition and ensures a more controlled and planned economy.

Furthermore, the government may also regulate competition through price controls and regulations. In a command economy, the government often sets prices for goods and services, which can limit competition among producers. By setting prices, the government can prevent excessive price competition and maintain stability in the economy. Additionally, the government may impose regulations on the quality and standards of goods and services, which can also impact competition by setting minimum requirements that all producers must meet.

Overall, in a command economy, competition is regulated through the central planning authority's control over resource allocation, production targets, price controls, and regulations. These mechanisms allow the government to manage and regulate competition to align with their economic goals and priorities.