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What is the essential difference between a command economy and a market economy?
In a market economy the prices of products and resources are largely determined by government regulation
In a market economy central planning creates an effective incentive system for consumers and producers
In a market economy buyers and sellers determine resource allocation
In a market economy shortages occur more often than surpluses



Answer :

GinnyAnswer

Final answer:

Market economies involve decentralized decision-making by buyers and sellers, while command economies are centrally planned by the government.


Explanation:

The essential difference between a command economy and a market economy lies in the degree of centralization and decision-making. In a market economy, buyers and sellers determine resource allocation, based on supply and demand, fostering competition and efficiency. On the other hand, command economies are centrally planned by the government, where the state owns resources and dictates production decisions, leading to less flexibility and innovation.


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