The state plays an important role in this economy since it optimizes the supply of the necessary resources for the population and acts as a market regulator in the event of failures. This system integrates elements of the planned and capitalist economy , the market, supply and demand . Within this model of economy, the private sector families and companies is the one who establishes market prices based on the law of supply and demand . The State has the right to intervene in the event of market failures such as very large inequalities or resource shortages. Mixed Economy Chart In the mixed economy influences both the state and the market.
Characteristics of the mixed economy Bosnia and Herzegovina Phone Number Among the main characteristics of the mixed economy we can highlight the following: Both the government and private entities participate in this economy . The government plays an important role in economic decisions, especially in aspects related to education and health. Prices are determined through the law of supply and demand . The government is in charge of intervening if there is any type of imbalance in the mixed economy of its region. Allows the existence of private property in the means of production. Allows business competition in markets. Anyone can become a partner in a company, based on their contribution and capital.
Rights are recognized and the intervention of the private sector is protected The government places limits on the intervention of private entities. There is the profit motive . Advantages and disadvantages of the mixed economy Advantage There are several advantages within this system which generate its existence and good execution, such as: Greater freedom in companies to manage their businesses. The most efficient producers receive benefits and rewards. Constant innovation to meet the needs of the buyer . Reduction of the disadvantages made by the market economy due to state intervention. More variety of choice for shoppers and consumers . Similar and controlled profits between markets.