China - of the products then there is no incenTve for...

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Planned economy – a central planner allocates what they believe are the quantities of goods required by a group of people. This results in misallocation since there is no way for the central planner to understand the needs of all the different people and regions. This results in shortage and idle goods Further, since they are only concerned with meeting the quantity quota and not the quality
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Unformatted text preview: of the products, then there is no incenTve for innovaTon. Demand is certain – there will be consumers regardless of how poor your product is. ±his is disTnguished from a capitalist society where demand is uncertain....
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