Advantages and Disadvantages of Mixed Economy

Mixed economy as the name suggests is an economy where all the activities related to production and other activities are carried out by participation of both government and private enterprises. Given below are some of the advantages and disadvantages of mixed economy –

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.

49 comments… add one
  • thanks for your fruit full clarification on the adv. and disadv. of mixed economy. please add any more tip

    • Vinish Parikh

      Thanks lewam for your comments, let me know what else you are looking forward for I will add it.

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  • Birungi Allen

    Thanks for helping us with clear notice.
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    • Vinish Parikh

      Thanks Alot

  • Aron philemon

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    • Vinish Parikh

      Thanks Aron

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  • Skanda Sharma

    This was very helpful to me because i had a project which i had to collect all these but it was not given in our text book ..It is very helpful…

    • Vinish Parikh

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  • Malaba, Mary

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  • michael

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    • Vinish Parikh

      Thanks, my endeavor is to give unique points to my visitors and i am happy to hear that you got information from this website which you could not found out in your textbook

  • I have benefited so much keep up helping scholars.

  • bryan

    thank so much

    • Vinish Parikh

      Welcome bryan.

  • Willy-nilly

    Thanks for posting it, it really satisfied my knowledge on mixed economy. KEEP UP THE GOOD WORK!

    • Vinish Parikh

      Welcome Willy-Nilly.

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      Hi Bulelwa,

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    These notes really helped me a lot

    • Vinish Parikh

      Thanks Tanishtha.



    • Vinish Parikh

      Wecome Anu.

  • Anshul Dogra

    Thanks u This info. Is to much help full to me as well as other i appriciate you for this work add more info. and help us thanks 🙂

    • Vinish Parikh

      Hi Anshul,

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  • ashwin n jain

    it’s really helpful thanks a lot

    • Vinish Parikh

      Thanks ashwin for your comments.

  • Anand Mavadiya

    Thanks 🙂

    • Vinish Parikh


  • abdullah lashari

    useful information,bcoz it is not included in our syllabus.

    • Vinish Parikh

      Hi Abdullah,

      Thanks for the comments let me know what else is not covered in your syllabus I will try to write on it.

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    • Vinish Parikh

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  • Jyeajesie

    Just a new student on Business. Your answer seems better than other as it’s easy to understand. Thanks.

  • Onur Ozturk

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  • khushi purohit

    please wl u help question is,distinguish between centraly planed economy and a market economy

    • Vinish Parikh

      Yes i am happy to help you, in order to know difference between planned and market economy you should read these two articles – Planned economy and market economy

  • sara shahira

    A lot of thanks for an information which is not in my textbook. Great explanation up there but if you could also add a very simple point each explanation will be much helper. So that I don’t have to explain again into very simple point for each to others when I ask them to search this web. Just give an opinion. Sorry and thanks.

  • Abeline

    thank you so much this have been very helpful to me because me too didn’t have this in my text book, keep it up. may god bless you
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  • courts

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  • Virginia Andreas

    You are my inspiration… Thank you very much for clarifying the advantages and disadvantages between all the economic systems. They are really helpful and I am so glad that they pulled me off the mud that I was stuck into. May the almighty give you more knowledge. Thumbs up

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