Question

A factory manufactures bicycles. Every year the government determines how many bicycles the factory will

produce. The factory workers will not be paid more for manufacturing more bicycles. There is a greater

demand for bicycles than the factory produces - but the factory cannot manufacture more bicycles than are

allowed by the government.

In what type of economic system and where is this factory most likely functioning?

Answer 1

This type of economic system is called the Command Economic system. This is because large part of the economic system is controlled by a centralized power who helps in the determination of the direction of the country's economy.

In the case of the government determing the number of bicycles being manufactured despite the demand shows that it is a command based economic system that was being runned in that country.

Step-by-step explanation: