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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