Definition
- Command economy
- A command economy is one where economic decisions are passed down from government authority and the government owns the resources.
- Not to be confused with: Market economy
- A market economy is one where economic decisions are decentralised, private individuals own resources, and businesses supply goods and services based on demand.
Test yourself
What is the difference between command economy and market economy?
In one, buyers and sellers make the decisions; in the other, the government does.
Learn it properly: the module
Also in: What a price does: rationing, signalling, incentive