Question

PLEASE HELP ASAP, I NEED TO DO THIS BUT DONT KNOW HOW TO. Describe how free markets solve the problem of coordination. Why do command economies struggle with this problem?

Answer 1

The advantage of a free market economy is that when it works it can both be reward and perpetuate innovation But they are inherently more risky and does tend to favor those more capital and resources . In an Economic make system with multiple equilibria coordination failure occurs when a group of firms could achieve a more desirable equilibrium but fail to because they do not coordinate their decision making