In a command economy, how are the prices of goods and services determined?
Answers
In a command economy, the prices of goods and several kinds of services provided are highly interconnected and they play a important role in fluctuating prices of commodities.
A country produces that amount of money only when, that shall be equal to the products available. If the country's resources gets reduced then cost of per commodity or product will increase simultaneously.
In a command economy, there is a central governing body which determines the price of the goods and services that will be offered in the market.
The central body also supervisors the wealth distribution among the service providers and good manufacturers so that there can be a consistency in the amount of production and supply.
Unlike capitalist markets, private manufacturers do not get the power to set prices for their goods.