Market, planned & mixed economies

Every economy has to answer the same three questions — what, how and for whom — but different societies answer them in very different ways. In this Advanced Subsidiary lesson we compare the three economic systems: the market economy, where the price mechanism and private profit decide; the planned economy, where the state decides everything centrally; and the mixed economy, which most real countries, including Namibia, actually use. We weigh the merits and demerits of each the way the AS examiner expects, and we look closely at the one factor of production that drives the market — enterprise — and its reward, profit.