Final answer:
In a command economic system, the central authority determines prices and production, including the goods and services to be produced, methods of production, and pricing. Market competition is significantly curtailed, and consumer preferences take a backseat to government planning. Cuba and North Korea are current examples of command economies.
Step-by-step explanation:
In a command economic system, a central authority, such as a government, makes all key economic decisions. Unlike market economies where prices and production levels are determined by supply and demand, a command economy operates under the guidance and control of the state. The central authority determines B) Prices and production, including what goods and services will be produced, the methods of production, and the prices for these goods and services. In this system, the government may also set wages for workers and can provide essential services like healthcare and education for free.
The control exerted by the government in a command economy significantly reduces the role of market competition. Consumer preferences are typically not the driving force; instead, the government plans and controls the economy with the aim of achieving broader social objectives.
Current examples of countries with command economies include Cuba and North Korea, where the respective governments hold substantial control over economic decisions and resources.