What is a mixed economy?

A mixed economy is accurately described as a combination of market and command economies. This type of economic system incorporates elements from both the free market, where supply and demand determine production and pricing, and the command economy, where the government exerts significant control over economic activities.

In a mixed economy, the government may intervene in the market to regulate industries, provide public goods, and address inequalities, while also allowing for private ownership and entrepreneurial freedom. This balance aims to harness the benefits of both systems, such as promoting efficiency and innovation through competition, while also ensuring that basic needs are met and certain social welfare objectives are achieved.

This understanding of a mixed economy highlights the collaboration between private and government sectors in decision-making that impacts the economy and societal welfare as a whole.