What is the difference between market economy and command economy?

Market economy refers to the economic system in which the prices and distribution of goods and services are determined by the forces of supply and demand. Command economy refers to the economic system in which the government controls the production, prices, and distribution of goods and services.

Which country is an example of a command economy?

Command economies are inflexible and slowly respond to changing market conditions. USA, UK, and Japan are examples of market economies. East Germany, North Korea, and the Former Soviet Union are examples of command economies. What is Market Economy?

How does government control the means of production in a command economy?

Because the government controls the means of production in a command economy, it determines who works where and how much they are paid. This power structure contrasts sharply with a free market economy, in which private companies control the means of production and hire workers based on business needs, paying them wages set by market forces.