3 Types Of Economy Essay

Three types of firms in economics are monopolistic firms, monopoly firms and oligopoly firms. Some of the characteristics that differentiate monopolistic firms from the other firms are ; each firm makes independent decisions about price and output based on its product, its market, and its costs of production, there is freedom to enter or leave the market as there are no major barriers to entry or exit, there are many producers and many consumers in the market therefore no business has total control over the market price, firms are price makers and are faced with a downward sloping demand curve and because each firm makes a unique product, it can charge a higher or lower price than its rivals. In the monopoly market however some of the

In a planned economy some characteristics such as government owning some or all resources in production and decides what goods should be produced and how they should be priced and government allocating the resources for production using the nation's capital, labour and natural resources in the most effective way possible which eventually reducing unemployment. An example of a planned economy is Cuba and North Korea. A mixed economy is an economy in which the government as well as the free market has a role to play in running the economy. This system allows a level of private economic freedom in the use of capital, but also allows for governments to interfere in economic activities. Two characteristics of a mixed economy are governments as well as the public has a say in the economy and there is free and controlled development and an example of a mixed economy is the United States. A free market economy is an economy in which there is no government interference in any economic activity. Two characteristics of a free market economy are almost all of the country's factors of production are owned privately and firms can sell anything they want. An example of a free market economy is