Profit Motive In Mixed Economy

The private sector is permitted to function in such a manner that gains are made by an increase in efficiency and not by exploitation of customers and workers.

Profit motive in mixed economy. In this system government takes several measures to reduce the gap between rich and poor through progressive taxation on income and wealth. Almost all the economies are mixed economies. Once societies include their social and economic priorities a mixed economy can help them attain their goals.

But an element of profit is also there. Certain industries will be in the public sector and certain industries in the private sector. For example a nation that owns or effectively controls a national airline that competes with the private airlines of other nations on multiple routes.

A mixed economy has the advantages of a market economy. In mixed economy both public sector as well as private sector industries will be functioning. Tyler has coffee with one of his direct reports almost daily.

Profit will be the primary motive of private sector industries. Lack of profit motive may lead to firms being inefficient. Vii Check on Economic Inequalities.

However many people cannot afford the things they need the market often puts the wants of richer people before the needs of poorer people and people can be harmed by the side effects of profitable transactions. Stated differently the reason for a businesss existence is to turn a profit. In the modern world it is difficult to find a pure market economy or a command economy.

The producers and individuals get motivated to work due to the rights of personal profit and ownership. Basically the reason for a businesss existence is to turn a profit. That means customers get the best value for their dollar.