Industries are directly operated or controlled by the government in a command economy, so their resources can be applied to whatever project needs to be completed. Instead of attempting a market takeover or trying to dominate a market share, the businesses work to produce the goods the society needs to function.Ģ. Their structures are dictated by the government, so there is consistency within the operational structures of each business. Within the structure of a command economy, the businesses which do function are operating at the behest of the government. Operations are consistent within a command economy. What Are the Advantages of a Command Economy?ġ. There are several advantages and disadvantages of a command economy to consider. When the government can centrally determine what pricing, production, investments, and income should be produced, then this is called a “command economy.”Įxamples of this form of government include the Soviet Union before is dissolution in 1991, North Korea, Cuba, and China before it began to allow economic reforms in 1978. The third is a hybrid between these two ideas. Another allows for the government to dictate these items. One allows the free market to dictate pricing, production, investments, and income. There are three basic economic structures that exist for a society.
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