A country with a command economy may have huge accumulations of goods that no one wants, while other products are in short supply. What does this situation seldom happen in market economies?

Question

Collin Noble

Social Studies

4 November, 10:40

A country with a command economy may have huge accumulations of goods that no one wants, while other products are in short supply. What does this situation seldom happen in market economies?

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Georgia Vaughn · Answer 1

In a market economy the production is determined not by someone's decision (which can be wrong, and a wrong decision is the reason why there there are unwanted goods or a lack of wanted goods) but it is regulated by the supply and demand: if there is a need for a good, it will be produced, and if there is no need for something, its production will halt and there will not be an unwanted storage.

In short, in a market economy, the economy itself regulates this.