Question

Why did the former soviet union use a command economic system instead of one based on prices?

Answer 1

A command economy occurs when the state is the owner of the means of production, so it is up to the government to decide the quantity of production and the price. In this model, there are no private companies or competition. Thus, there are no firms to compete, so there is no pricing mechanism.These economies are intended to meet the needs of individuals equally. It is the state that decides what to produce, for whom to produce, how to produce, and the price of goods. This is totally different from a market economy, where there is private enterprise and firms operate under price competition, the most efficient firm will offer the good at a lower price.

Answer 2

The former Soviet Union used a command economic system instead if one based on prices because it sought to create a society in which everyone had the same choice. It hoped to achieve this by controlling the actions of the buyers and sellers