ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In a command economy, the government (or some other central authority) controls and steers major aspects of economic production. The government decides the means of production and owns the industries that produce goods and services for the public.

Detailed explanation-2: -In a market economy, the producer gets to decide what to produce, how much to produce, what to charge customers for those goods, and what to pay employees. These decisions in a free-market economy are influenced by the pressures of competition, supply, and demand.

Detailed explanation-3: -Key Takeaways Market economies utilize private ownership as the means of production and voluntary exchanges/contracts. In a command economy, governments own the factors of production and set prices and production schedules. In a market economy, prices are set by supply and demand.

Detailed explanation-4: -The central feature of a pure command economy is government control. Rather than letting market forces dictate the production of goods and services, the government determines economic priorities and controls production and pricing.

Detailed explanation-5: -In a command economy, the government determines how the goods and services are distributed. In a command economy, no one can start their own business. The government determines how and where the goods produced would be sold.