Business Organization

Business organizations
●​ PLANNED ECONOMY
Here the government has maximum intervention: it decides which goods to
produce and at what price (ex. socialism and communism).

—--> Advantages:
-​ controlled prices
-​ less inequality

—--> Disadvantages:
-​ less freedom of choice



●​ FREE MARKET ECONOMY
Here government intervention is minimal; resources are privately owned and
the private sector organizes economic activities (ex. capitalism).

—--> Advantages:
-​ equal opportunities to improve living standards
-​ entrepreneurship is encouraged

—--> Disadvantages:
-​ gap between rich and poor
-​ monopolies



●​ MIXED ECONOMY
Production is carried out by the private sector according to supply and
demand. The government monitors the market and intervenes through fiscal
policies. The public sector provides services such as education and
healthcare.

—--> Advantages:
-​ collaboration between the public and private sectors
-​ private companies have the freedom to operate

—--> Disadvantages:
-​ it presents disadvantages of both capitalism and socialism