What is a Mixed Economy

Hello sir I am here as I want to know what is Mixed Economy so will you please tell me about this??

A mixed economy is variously defined as an economic system consisting of a mixture of either markets and economic planning, public ownership and private ownership, or free markets and economic interventionism

However, in most cases, "mixed economy" refers to market economies with strong regulatory oversight and governmental provision of public goods, although some mixed economies also feature a number of state-run enterprises.


Main Features of Mixed Economy:

Mixed economy has following main features:

(i) Co-existence of Private and Public Sector

(ii) Personal Freedom

(iii) Private Property is allowed

(iv) Economic Planning

(v) Price Mechanism and Controlled Price

(vi) Profit Motive and Social Welfare

(vii) Check on Economic Inequalities

(viii) Control of Monopoly Power:


Types of Mixed Economy:

The mixed economy may be classified in two categories:

Capitalistic Mixed Economy:

In this type of economy, ownership of various factors of production remains under private control. Government does not interfere in any manner. The main responsibility of the government in this system is to ensure rapid economic growth without allowing concentration of economic power in the few hands.

Socialistic Mixed Economy:

Under this system, means of production are in the hands of state. The forces of demand and supply are used for basic economic decisions. However, whenever and wherever demand is necessary, government takes actions so that basic idea of economic growth is not hampered.

However, this system is again sub-divided into two parts:

(i) Liberal Socialistic Mixed Economy

(ii) Centralised Socialistic Mixed Economy


Advantages

-Producers and consumer have sovereignty to choose what to produce and what to consume but production and consumption of harmful goods and services may be stopped by the government.

-Social cost of business activities may be reduced by carrying out cost-benefit analysis by the government.

-As compared to Market economy, a mixed economy may have less income inequality due to the role played by the government.

-Monopolies may be existing but under close supervision of the government.

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Answered By StudyChaCha Member