In a command economy, what determines the production and distribution of goods?

In a command economy, the government plays a central role in determining the production and distribution of goods. This economic system is characterized by significant governmental control and oversight, wherein a central authority makes decisions about what to produce, how much to produce, and how to allocate resources. This often involves setting prices, planning production schedules, and regulating what goods are available in the marketplace.

The key feature of a command economy is that it contrasts sharply with market economies, where supply and demand guide production and distribution. In a command system, the government aims to achieve specific social and economic outcomes, often prioritizing collective goals over individual preferences, which allows for a structured approach to resource allocation based on predefined plans rather than market fluctuations or consumer choice.

This model can be observed in various historical contexts and contemporary examples where state planners direct economic activity based on broader objectives rather than market dynamics.