The transition from a centrally planned economy to a free market or a Essay - 1

The inflection from a centrally planned economy to a free grocery store or a mixed economy (Russia and China) - Essay ExampleHowever, where there is existence of monopoliser in a capitalistic market there would be a single producer who would not tint the market demand and would charge an exorbitant price to the buyers. This happen because the monopolist would be the sole owner of the means of production in that market (Samuelson and Nordhaus 29-47). and so in circumstances of monopolisation there is an igneous need for the intervention of the government of the commonwealth and to put a price ceiling so that the monopolists power is under check. On the other hand in case of a centrally planned economy there is a monopolisation of the power of the government. Hence the prices and the allocation of the resources are persistent entirely by the government of the country. Thus the decision regarding the price and quantity controls would be taken by the government of the country.A part of the Soviet Union the economy of Russia was a centrally planned economy. The enterprises in the country were completely under the control of the government. This set up was existent in the country from 1982 to 1991. Due to the control condition framework in the country there was stagnation in the growth and development in the economy. Therefore after the collapse of the Soviet Union in 1991, there was a need felt for the transition of the economy to an economy which is market based (Snooks 12-19). There were several aspects of this transition.