In a centrally planned economy

Question

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In a centrally planned economy, the government sets prices and determines how much of each good is to be produced. This contrasts with a market economy, where prices are determined by supply and demand. Consumers still have to consider prices when shopping, but the prices are set by the government rather than by businesses. Prices are not necessarily zero, as the government may charge for goods and services. Producers may not have an incentive to produce those goods most desired by consumers at the lowest cost, as they are following government directives rather than responding to market signals.

In a Centrally Planned Economy