Final answer:
A market economy is characterized by private sector decision-making and decentralized control, where firms and consumers determine production based on demand. In contrast, a command economy features centralized control by the government, which makes all decisions about production and distribution. Most economies today contain elements of both systems.
Step-by-step explanation:
The difference between a market economy and a command economy revolves around who makes the key economic decisions. In a market economy, decisions about what to produce, how to produce, and who gets the produced goods and services are predominantly made by consumers and firms—this is a decentralized system that relies on private enterprise and market forces. On the other hand, a command economy has a centralized decision-making structure where the government or central authority makes all the decisions regarding production and distribution of resources and goods.
Most modern economies are mixed, involving both market and command elements, which means that some decisions are made by individuals and private firms, and others by government officials. Nevertheless, in the purest form of a market economy, private individuals or groups own and operate the means of production, responding to consumer demand, while in a command economy, the government owns resources and businesses, and supply is determined by the government's planning.