Definition: A command economy is where a central government makes all economic decisions. The government or a collective owns the land and the means of production. It doesn't rely on the laws of supply and demand that operate in a market economy. A command economy also ignores the customs that guide a traditional economy. In recent years, many of these centrally-planned economies have added aspects of the market economy.
A command economy is a system where the government, rather than the free market, determines what goods should be produced, how much should be produced and the price at which the goods are offered for sale.
