What are the disadvantages of mixed economy system?

The disadvantages of a mixed economy really depend on how "mixed" it is. For instance, if it is mixed more towards a free-market, there is little regulation (some may see this as a good, though), but if it is mixed more towards a command economy, the control may stifle growth.

Mixed economies can also have different characteristics. For instance, mixed economy A maybe high tax low regulation while mixed economy B might be low tax and high regulation. Each of these will share a different set of disadvantages. A will stifle profits due to it's high tax structure, but will encourage new ideas due to its low regulation (this could result in many weird effects such as an economy comprised almost solely of small, well-niched businesses). B will encourage profits, but due to its regulation, some new ideas (and some growth) will be stifled. For instance, if environmental regulations are strict, the building of new plants or refineries might be lowered. This could result in a small number of very large and profitable businesses.

The key is to find a balance amongst the many facets of economies (mixed economies are not limited to the two dimensions mentioned in this answer - regulation and taxes. There are many many more ways to fashion a market structure) the both encourages growth and supports the beliefs of the populace that are governed by it.

First answer by ID3397766980. Last edit by Sefner. Contributor trust: 29 [recommend contributor]. Question popularity: 63 [recommend question]

Research your answer:

Can you answer other questions about economic theory?

Answers.com > Wiki Answers > Categories > Science > Social Sciences > Economics > What are the disadvantages of mixed economy system?

Our contributors said this page should be displayed for the questions below. (Where do these come from

)

If any of these are not a genuine rephrasing of the question, please help out and edit these alternates.

Who uses mixed system? Merits of mixed economy? Is india not a mixed economy? Facts on mixed market economy? Disadvantages of economy system? Disadvantages on a mixed economy? Disadvantages of the mixed economy? Conclusion regarding mixed economy? Scope of india as a capitalist economy? Advantages of black economic employment? Disadvantages of a mixed economy system? What are disadvantages of a mixed economy? What is a disadvantage of a mixed economy? The disadvantages of mixed economy system? What are the costs of mixed economy system? Is the democratic system used mixed economy? What are the disadvantages of mixed economy? What are the disadvantages of amixed economy? Why wouldn't a country choose a mixed economy? Adavantages and disadvantages of a mixed system?