Benefits Of The Command Economy

A market is defined as a medium where the concept of demand and supply perform, where traders and buyers interacts – directly or through middlemen – to trade products, services and information with money (Pierre A. Buigues & Patrick Rey, 4th edn, Edward Elgar Publishing 2004)45. Although markets are independent entities that can occur anywhere and anytime, they are still regulated and controlled by the state, global and national political and economic systems, as well as the industries in which they operate (Richard L. Carson, 2nd edn, Routledge 2015)46. In most cases, a market will be termed as the individuals or a group of people within a population who need a product or service. This may lead marketing units within corporations to conduct …show more content…
Tucker, 8th edn, Cengage Learning 2013)539. In this type of economy, most of the institutions are publicly owned and the valuable resources are owned by the federal government. William A. McEachern, (3rd edn, Cengage Learning 2011)31 notes that the benefit of command economy is that the government can generate an active supply of its own resources that may reach the most underserved populations, for instance, electricity generation. This can be helpful to the general population in case there are monopolies controlling the market. The market economy on the other hand, is where the government has no control of valuable resources of the economy. According to Anthony T.H. Chin (1st edn, World Scientific 1996)92 the perfect competition exists in the market economy where different players – traders, middlemen and buyers – operate and where it is difficult for one player to modify existing market prices. The mixed economy is an economy with mixed variations because a country can lean towards free market economy or more towards a command economy. This economic system can minimize monopolisitic competition that tends to exist in economies where are stern competition and monopolies controlling the prices. In addition, most business can privatized and allowed to distribute their products and services as they please (Sanfor Ikeda, 1st edn, Routledge 2002)124. This has the benefit of allowing large corporations to focus on the bottom of the pyramid using the bottom of the pyramid approach. The bottom of the pyramid approach is the concept that companies can be able to serve the underserved population at the bottom of the pyramid (under-privilege) in a way that makes them make proceeds and promote development (Rave Peter, 1st edn, GRIN Verlag 2010)