What role does the law of supply and demand play in a command economy?

A. The law of supply and demand functions the same way as in other economies, but the government sets the prices.
B. The law of supply and demand functions in reverse because a command economy is the opposite of a market economy.
C. The law of supply and demand applies to a command economy as much as it does to other economies.
D. The law of supply and demand does not apply because in a command economy, the government controls the market.

A command economy does not allow market forces like supply and demand to determine what, how much, and at what price they should produce goods and services. Instead, the central government will plan, organize, and control all economic activities, discouraging market competition.

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AbsorbingMan AbsorbingMan · Answer 2 · 2022-04-28T14:06:00+02:00

In a command economy, the law of supply and demand does not apply because in a command economy, the government controls the market.

Command Economy

A command economy is defined as an economy where the centralized government of the country controls and determines the production and output levels.

In a command economy, the supply and demands of a market does not determines the prices and the output of goods and services.

The government takes the decision and controls the market irrespective of supply and demand in the market.

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