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What is Mixed economy ? Advantages and Disadvantages of Mixed Economy

Mixed economy consists of both government owned or state owned entities and private companies, they both have the control or power of selling, making, owining and exchanging goods in the country. Mixed economy system  consist of both free market and command economic practice.

Some points on Advantages of mixed economy are :

  1. In mixed economy system, state provides the essential services required.
  2. Private sectors are encouraged for profit.
  3. Competition keeps the price low in mixed economy.
  4. Goods of consumer choice because of competiton.
  5. Inefficient business behavior is controlled in mixed economy.
  6. Higher chances from the government to implement good polices to controll economy.
  7. Mixed economy allows individual to run their business and make profits.
  8. Less inequality of income is found  because the policy of govenment is to have a balanced economy growth of an economy.
  9. The socialist nature of government and the capitalist nature of private companies help to grow mixed economy.

Some points on Disadvantages of mixed economy are :

  1. Mixed economy can be less efficient than the private sector
  2. Due to excessive control over business activity, it can discourage enterprise and can add costs.
  3. Reduced incentives to work hard or make profits due to heavy taxes.
  4. Challenges of finding balance between both of them.
  5. Limited corporate size.
  6. Under mixed economy wastage of various types of resources in observed.
  7. Mixed economy suffers from continuous backwardness
  8. Optimum use of resources is not controlled in mixed economy

Market economy : Advantages and disadvantages
Planned economy : Advantages and disadvantages
Traditional economy : Advantages and disadvantages


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