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 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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