What characterizes a command economy?

A command economy is characterized by decisions made by the government. In this type of economic system, the state typically has control over the production and distribution of goods and services, which means that the government determines what to produce, how much to produce, and at what prices goods and services will be sold. This central planning contrasts sharply with market-driven economies, where individual consumers and businesses make decisions based on supply and demand dynamics.

In command economies, the emphasis is on collective goals rather than individual entrepreneurship and market freedom. This structure is often seen in communist or socialist countries where the government seeks to ensure equality and control over the economy to meet the needs of the populace. The focus on government decisions often leads to less flexibility and responsiveness to consumer preferences compared to market economies.