True, in a Mixed Economy is where Businesses are free to make many choices, but they face some government regulation.
What is Mixed Economy?
Mixed economy, in economics, a market system of resource allocation, commerce, and trade in which free markets coexist with government intervention.
A Mixed Economy may emerge when a government intervenes to disrupt free markets by introducing state-owned enterprises (such as public health or education systems), regulations, subsidies, tariffs, and tax policies.
Alternatively, a Mixed Economy can emerge when a socialist government makes exceptions to the rule of state ownership to capture economic benefits from private ownership and free market incentives. A combination of free market principles of private contracting and socialist principles of state ownership or planning is common to all Mixed Economies.
A Mixed Economy is one in which public sector (consisting of government enterprises) and private sector (consisting of private enterprises) coexist with each other. Here some important decisions are taken by the government and economic activities are by and large conducted through market. Thus both Central Authority and price mechanism play their roles in solving central problems.
In the initial years of planning, India followed the lines of being a socialist economy. Public sector was accorded a dominant role in the growth and development process.
However, in the long run it was found that the public sector was plagued with inefficiencies and incurred huge losses.
Moreover, excessive control on the private sector hampered their growth and the industrial sector lacked modernization.
All these factors lead to the stagnation of the Indian economy. Thus, in order to boast up growth in the country and to reduce the inefficiency in the public sector, India adopted moved towards being a Mixed Economy.
What is Business?
A Business is an organization or any other entity engaged in commercial, professional, charitable or industrial activities. It can be a for-profit entity or a not-for-profit entity and may or may not have a separate existence from the people/person controlling it.
A Business is a commercial activity which involves providing goods or services with a primary motive of earning profits.
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