Advantages of Mixed Economy 1.

Since mixed economy involves both government and private enterprises it has the advantage of taking the benefits of capitalist nature of private companies and socialist nature of government. 2. There is less inequality of income because intent of government is to have a balanced economic growth of an economy. 3. Mixed economy allows individuals to run their business and make profits but at the same time it places some responsibility on these companies by inducing them to contribute towards the welfare of society. Disadvantages of Mixed Economy 1. Since welfare of society is important in a mixed economy it leads to lower than optimum use of the resources because government mobilize the resources towards the production of those goods and services which are beneficial for the society as a whole rather than producing those goods and services which in economic terms are more beneficial for an economy. 2. Under mixed economy private enterprises have to face lot of difficulty because of various government loopholes like favoritism and bureaucratic nature which is prevalent in mixed economy. As one can see that mixed economy like socialist and capitalist economies has both advantages and disadvantages and therefore it will be always debatable whether a country should follow mixed economy structure or not.

A mixed economy is an economic system that incorporates aspects of more than one economic system. This usually means an economy that contains both privately-owned and state-owned enterprises or that combines elements of capitalism and socialism, or a mix of market economy and planned economy characteristics. This system overcomes the disadvantages of both the market and planned economic systems.

Features

Resources are owned both by the government as well as private individuals. i.e. co-existence of both public sector and private sector. Market forces prevail but are closely monitored by the government.

Advantages

Producers and consumer have sovereignty to choose what to produce and what to consume but production and consumption of harmful goods and services may be stopped by the government. Social cost of business activities may be reduced by carrying out cost-benefit analysis by the government. As compared to Market economy, a mixed economy may have less income inequality due to the role played by the government. Monopolies may be existing but under close supervision of the government.

The economic structure of a nation is a very important factor in the progress of the country. While in some countries, the economic structure is completely controlled by the government; the private organizations or the market force is the deciding factor in the economy of some countries. However, in mixed economy, both the government and the private sector jointly control the economic structure. There are numerous advantages of a mixed economy.

a. Provides fair competition: The presence of private enterprise ensures that there is fair competition in the market, and the quality of products and services are not compromised.

b. Market prices are well regulated: The government with its regulatory bodies ensure that the market price do not go beyond its actual price.

c. Optimum utilization of national resources: In a mixed economy, the resources are utilized efficiently as both government and private enterprises are utilizing them.

d. People are given more power: The general people have more say when it comes to the quality and the prices of products and services.

e. It does not allow monopoly at all: Barring a few sectors, a mixed economy does not allow any monopoly as both government and private enterprises enter every sector for business.