Anonymous asked in Social ScienceEconomics · 2 months ago

Confused about microeconomics and command economies. Help is really appreciated, please!?

My textbook states the following about command economies: "Producers in command economies like China before 1980 or the Soviet Union before 1991 routinely found themselves unable to produce because they did not have crucial raw materials, or if they succeeded in producing, they found nobody wanted their products. Consumers were often unable to find necessities like toilet paper or milk. Command economies are infamous for long lines at shops" (Krugman 2). 

I feel this is contradictory because first it states that "nobody wanted the products". Then, it goes on to state that "command economies have long lines". If nobody wanted the products, how can there be long lines?

2 Answers

  • JuanB
    Lv 7
    2 months ago

    saying routinely suggest frequently, but not all the time.  Saying nobody is typical capitalistic exaggeration.  

  • Oiy
    Lv 6
    2 months ago

    In the commune, the supply and demand are created by the central planning agency using input-output analysis. It is not about profits. So it might be wrong somewhere so that the shortage of goods can occur. Microeconomics is all about individual consumer and producer rushing for profits. It can be wrong too. The production will follow the trend of the market. Our limited resources will be exploited in the wrong way.

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