Differences between Market and Planned Economy

... Market Economy Planned Economy * Does not need officials or civil servants to decide what should be produced. The gov't has no part to play in running the economy. So, there is less bureaucracy and red tape. * Many planners and administration are needed to run the system. It leads slow decisions, red tape, nepotism and corruption. * Does not recognize any sense of duty to the community. Only those goods and services offering a profit are produced. Some essential services like education, library services and museums may not be produced adequately to be made available by private firms because the production of these services is not profitable. * In planned, goods and services which would not be produced by market economy system may be provided by a planned economy. These include social, educational and cultural development. * Responds quickly to people's wants. It becomes profitable to produce goods and services that people want and

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