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Why are command economies usually less efficient than market economies?

Cynthia Baker

in Business

1 answer

1 answer

Samantha Barber on December 19, 2018

In command economies, is the government (politicians) who decides what is produced, when and how. Such decisions are not always well informed - which may be politically motivated and uninformed. Therefore, often, the wrong items are produced, as well as many of the refrigerators, whereas what is needed are wasching machines. In contrast, in market economies, it is the market that regulates directly, through the decisions that people take, and this is much more efficient.

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