ZIMSEC O Level Business Studies Notes: Command Economy/ Planned Economy


  • The government owns and manages all the resources.
  • The government determines what to produce, how much to produce and for whom to produce
  • The main motive is to provide goods and services rather than profit
  • The government sets the prices
  • Examples include Cuba, China and North Korea


  • Prices are kept in control.
  • Equitable distribution of wealth.
  • Low levels of unemployment as the government provides employment for everyone.
  • Elimination of wastage as there is no duplication.
  • Provides essential goods.


  • Consumers cannot choose what to buy since there is usually only one brand.
  • Takes time to respond to changes in consumer needs and wants.
  • Lack of profit motive may lead to inefficiency.

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