Question
How does the mixed economy system solve the problem of basic economic problems

Answers

The basic problems of a mixed economy areWhat to produce? - In mixed economy 'what to produce' is decided on the basis of demand and some private sectors. Firms examine demand and concentrate on goods whose demand is more. This question is then answered by the market forces of demand and supply. The motive is to obtain economic growth as well as social welfare.How to produce? - Once 'what to produce' is decided, 'how to produce' is the next problem that arises. They need to decide what techniques are to be used. Techniques depend on the cost of production. It can be either capital intensive technique or labor intensive technique.For whom to produce? - Public and private sectors decide the distribution of goods and services. They decide it on the basis of the level of income. If the demand of a thing is more, then its production will be more.   Your Comment






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