A decrease in the price of one good encourages consumers to switch to buying that commodity. People on high incomes are able to buy more goods and services than are the less well off. In a command-planned or socialist economy the government owns most resources and decides on the type and quantity of a good to be made. The USSR and North Korea are examples of command economies. The government sets output targets for each district and factory and allocates the necessary resources.
Incomes are often more evenly spread out than in other types of economy.
In a mixed economy privately owned firms generally produce goods while the government organises the manufacture of essential goods and services such as education and health care. The United Kingdom is an example of a mixed economy. These pages are based on original material written by Richard Young of Wood Green School Witney.