Mixed Economy

Characteristics/Features
• Incorporates both aspects of the planned and free market economies
• There is a public sector which consist of government owned entities and
• A private sector which consist of private owned entities.
• Public sector entities aim to provide a service while
• Private sector businesses have a profit motive.
• There is moderate government control e.g. via the fiscal and monetary policies.

Public sector

• Is made up of entities that are owned and controlled by the local and national government (and the Federal government where one exists).
• These entities exists mainly to provide a service rather than to make a profit.
• Sometimes they have an excess of income over expenditure.
• This is known as a surplus.
• Examples of business organisation in the public sector in Zimbabwe include GMB, ZRP, NocZim, Netone, Teleone etc.

Private Sector

• Is made up of entities that are controlled and owned by private individuals.
• These exists mainly to make a profit.
• Examples include sole trader businesses, partnerships and companies.
• Examples of entities that are in the private sector in Zimbabwe include TM, OK, Spar etc.

Advantages
• Consumers are free to choose what they want.
• All products including public products are produced.
• Social costs are internalized through taxes.

To access more topics go to the Business Studies Notes page.