Question

Difference between market economy and centrally planned economy

Answer 1

A market economy is an economic system in which the decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand. 
A centrally planned economy is an economic system in which the state or government makes economic decisions rather than the interaction between consumers and businesses. ... State-owned enterprises undertake the production of goods and services.

Answer 2

Answer:

In a theoretical market economy, supply and demand through free competition should determine prices. ... The citizens are the ones who decide economic policy and prices of goods and services. In a centrally planned economy, the government makes decisions, instead of consumers and businesses.