Ans. In a command economy, the government controls all aspects of the economy, including what goods and services are produced, how they are produced, and for whom they are produced. Prices are set by the government, and there is little or no competition. In a market economy, on the other hand, the decisions about what, how, and for whom to produce are made by individuals and firms in the marketplace. Prices are determined by supply and demand, and competition among producers ensures efficiency and innovation. Most modern economies are mixed economies, which combine elements of both command and market economies.