Business Environment

Command Economy

Good example- Russia

Heavily based on Demand

  • Government chooses who produces and what is produced. 
  • 5 year plan;

Advantages;-  Strong government makes sure public/merit goods are consumed at the right level.

-Government can control goods/services for the good of the country

Disadvantages;- Unable to efficiently allocate goods

-Shortages or surplus

-Minimum innovation

-Wages fixed, no choice for work

-5 year plan too long as things can change quickly.

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