Economics Market Economy Questions
In a market economy, the allocation of resources and production decisions are primarily determined by the interactions of buyers and sellers in the marketplace. The prices of goods and services are determined by supply and demand, and individuals and businesses have the freedom to make their own economic decisions.
On the other hand, in a command economy, the government or a central authority has control over the allocation of resources and production decisions. The government sets prices, determines what goods and services will be produced, and decides how resources will be distributed.
Overall, the main difference between a market economy and a command economy lies in the level of government intervention and control over economic activities. In a market economy, decisions are decentralized and based on individual choices, while in a command economy, decisions are centralized and made by the government.