A mixed economy is a system that combines market, command, and traditional characteristics. It enjoys the benefits all three while suffering from a few of a drawback. So here this article gives the Pros and cons of the mixed economy to better understand this topic.
Pros OR Advantages of mixed economy:
- The most important benefit of a mixed economy is that it encourages the private sector and allows it to flourish properly.
- It has a greater chance for the government to implement good policies.
- Inefficient business behavior controlled.
- Completitionkeep prices low.
- State provides the essential services.
- The private sector encouraged profit.
- Consumer choice is provided.
- It can concentrate on social welfare, political freedom, and individual liberties.
- More job investment coming in safe haven from poverty.
- Balance of needs and wants to be met by the government and in the marketplace.
Cons OR disadvantages of mixed economy:
- Less efficient than the private sector.
- Excessive control over business activity can increase costs and discourage entrepreneurship.
- Limited corporate size.
- Government going too far.
- Challenge of finding balance.
- Because they are subsidized by the government, some government-owned industries are allowed to operate inefficiently.
- The government may regulate the economy so tightly that this dampens the free enterprise spirit.
- When the government intervenes in the market to set price control, this may either cause excess demand to exceed supply which can be costly to regulate.
- Taxes that are too high reduce the incentives to work hard or make a profit.
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