Mix economic system
Mixed economic system is an economic system where resources are allocated and controlled by the state and private individuals. There are features of plant and market economic in the mixed economy system.
The government intervenes to modify the operation of the market forces of demand and supply e.g. of those who practice such system is Cameroon, Ghana etc.
Features or characteristics of mixed economic system
- Individuals and government own properties and can carry out the production of goods and services
- Individuals operate in the private setup for profit motive while the government operate in the public sector to provide essential goods and services to the public at reasonable prices
- Government intervenes to regulate the private sector and to re-distribute income.
Advantages
- Public goods such as defense, law and order, streetlight is provided by the government through taxation
- The consumption and production of harmful goods are controlled by the government by making the illegal or leaving high taxes on them.
- Private ownership of properties encourages investment from abroad
- Citizens have some influence over the use of natural resources
- There is high efficiency in the allocation of resources
Disadvantages
- High axes may discourage hard work
- The taking over some industries by the government reduces efficiency because of no competition
- Monopoly may develop which exploit consumers by restricting supply and charging high prices
- There is disparity in the distribution of income and wealth.
