Question

One of the assertions of Micro economics is that a Laissez-Faire economy is better than a Command economy. What is you opinion. We will revisit this question at the end of the course.

Answer 1

The laissez faire economy is always better than the command economy because of the few reason:

• The consumer can buy anything and the producer can sell anynting, it will lead to a fair and free economy ,
• as all the firm in the market are working for a profit it will lead to a greater efficiency and reduce the wastage of the resources.
• As all the buyers are looking to maximise the profit it will lead to a better allocative efficiency in the market.
• overall it result in a better economic surplus than command economy where market is not allowed to operate freely.